London listed life and pensions firm Chesnara has snapped up one of Legal & General's (L&G) non-core divisions in a deal worth €160m (£136m).
Shares in Chesnara leapt up by seven per cent following the news that it had agreed to buy L&G's Dutch life and pensions business, which will be part-funded by a placing of £70m of new shares on the stock market.
Chesnara's chief exec John Deane said Legal & General Nederland will continue to write new business, unlike Waard, a smaller Dutch firm Chesnara owns which is closed to writhing new policies.
"We see great opportunities for both organisations within the Chesnara group to deliver value to our customers, their advisors and our shareholders," said Deane.
The new shares will be issued at 300p a share, a discount of around 30p to the current trading value.
The remainder of the proceeds will be funded through new banking facilities to be provided to Chesnara. The company said it had agreed €71m of lending, part of which would go towards the acquisition and £40m would be used to refinance existing debt facilities of £53m.
Read more: Going Dutch raises Chesnara's profits
Shareholders have until 12 December to apply to for the new shares with them being admitted to the market on 15 December. Chesnara said it expects to complete the transaction to purchase Legal & General Nederland by the first quarter next year.