The soldier saved his friend by sacrificing his own life.
Literal
Soldier [topic-は] own life [object-を] sacrifice-[by doing-にして] friend [object-を] saved.
犠牲にして uses を…にする (to make X into Y) in て-form as a means clause — literally 'making his life a sacrifice, he saved his friend.' 自分の signals that the life belongs to the sentence's subject, a common pattern to clarify possession in third-person narrative.