International law firm Pinsent Masons has advised Direct Line on the sale of its closed life insurance business to Chesnara plc for a cash consideration of £39.3m.

The deal allows Direct Line to release a further £23m of capital, which was previously required to back the policies, resulting in total sale proceeds of £62.2m. Direct Line plans to return the sale proceeds to shareholders through a special dividend.

Direct Line, which was floated by The Royal Bank of Scotland plc in one of London's largest initial public offerings last year, operates under well known brands such as Direct Line, Churchill, Green Flag and Privilege.

Pinsent Masons fielded a cross discipline team led by life insurance specialist Bruno Geiringer and financial services M&A partner Sean Page.  Bruno and Sean were assisted by Charlotte McIntyre and Emma Shield.

Commenting on the deal Sean Page said:

"We are delighted to have brought this important transaction to a successful conclusion for Direct Line which now allows the group to make an increased return to shareholders."

Bruno Geiringer added:

“This deal called on our specialist experience in Insurance M&A.  As insurers across Europe continue to refocus strategy around their core propositions, we expect that restructuring activity in the Insurance sector will continue to be strong for the next 12 months.”