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LONDON, July 11 (Reuters) - Friends Life Group Ltd announced disposal of its Lombard unit to Blackstone Group for an initial consideration of 317 million pounds ($532 million) and said it will use part of the proceeds to buy-back shares.
The deal, expected to be completed in the second half of 2014, includes 261 million pounds in cash payment, which the insurer will use to buy-back shares.
"This disposal further improves our cash coverage of the dividend and is in line with our strategy to maximise value from each part of the Group," Andy Briggs, Group chief executive of Friends Life said in a statement on Friday.
"It moves the Group further towards being a streamlined life insurance company, focused on serving our customers in the UK and our hubs in Hong Kong, Singapore and the UAE through Friends Provident International."
Friends Life will sell its entire share capital in subsidiaries Lombard International Assurance S.A. and Insurance Development Holdings AG, jointly known as Lombard.
The deal involves a total consideration of up to 356 million pounds based on an additional contingent element, it said in the statement. ($1 = 0.5956 British Pounds) (Reporting by Nishant Kumar; Editing by Clare Hutchison)