Principal Financial Group Inc. announced that it will acquire HSBC Afore from Mexico-based Grupo Financiero HSBC for approximately $198 million.

HSBC Afore, HSBC’s Mexican pension fund business, will merge with Principal to form Principal Afore. In addition, Principal and HSBC Bank have agreed to establish an exclusive distribution arrangement of Principal Afore’s products through HSBC’s network of more than 1,100 branches.

The acquisition will make Principal Afore the country’s sixth-largest pension fund business in terms of assets under management, with more than 7 percent of the market share, Principal said in a press release.