Countrywide owner Chesnara in talks to buy L&G's Dutch arm

The London-listed owner of Countrywide Assured is in advanced talks to buy an overseas unit of Legal & General (LSE: LGEN.L - news) (L&G) in the latest example of European insurance industry consolidation.

Sky News has learnt that Chesnara (LSE: CSN.L - news) , which has a market value of just over £400m, is expected to pay around £130m for L&G's Dutch operations.

The division is ‎understood to have been designated as non-core by L&G's board, and accounts for a small fraction of the FTSE-100 company's business.

A sale, which sources said was expected to be announced later this week, would continue a European retrenchment by Nigel Wilson, L&G's chief executive, following disposals in France and Ireland (Other OTC: IRLD - news) .

Mr Wilson has instead been ploughing capital into long-term infrastructure opp‎ortunities and insuring corporate pension liabilities such as a £1.1bn scheme managed by Rolls-Royce Holdings.

For Chesnara, the deal will represent a significant bet on the expansion of its Dutch operations, which account for a small part of its portfolio.

It also manages closed life and pension‎ books in the UK and Sweden, and counts L&G's asset management arm among its largest shareholders.

Analysts said that Chesnara was likely to seek new capital from investors to back such an acquisition.

The transaction between Chesnara and L&G ‎follows a string of deals involving major European insurance companies including Aegon (Swiss: AGN.SW - news) and Axa (Paris: FR0000120628 - news) in recent months.

L&G declined to comment, while Chesnara could not be reached for comment.