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The Preston-based owner of Countrywide Assured has agreed to acquire a specialist provider of insurance and long-term savings products in the ������Ƶ for almost £40m.

Chesnara has entered into an agreement with Sanlam ������Ƶ to acquire Sanlam Life & Pensions ������Ƶ Limited (SLP) for £39m.

The listed company said the deal enhances the scale of its operations in the ������Ƶ by adding £2.9bn of assets under administration and c.80,000 policies.

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The cash consideration of £39m is to be funded from Chesnara's existing debt facility.

Chesnara chief executive John Deane said: "We are delighted to announce this transaction which will expand the scale of our ������Ƶ operations and deliver potential for material value creation for Chesnara.

"The expected incremental cash generation from SLP will enhance the sustainability of our progressive dividend strategy.

"SLP's business is well aligned to Chesnara's acquisition strategy and will be integrated with our existing ������Ƶ operations.

"We look forward to welcoming SLP's customers and staff to the Chesnara group and continuing to work with Sanlam on the management of SLP assets.

"We believe that the market prospects for further acquisitions across our target markets remain positive and we continue to be confident in our ability to finance and execute such transactions on attractive terms for both vendors and our shareholders."

The deal is expected to be completed early next year.

Jonathan Polin, chief executive of Sanlam ������Ƶ, added: "This deal is a testament to the strength and quality of SLP and its long-standing track record of excellent client service. I would like to thank all my colleagues there for their unstinting efforts.

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"Chesnara is a highly respected and established life insurance and pensions consolidator and I am confident that the business will flourish under its new ownership for the benefit of all its key stakeholders, including policyholders."