UPDATE 1-Friends Provident to take stake in Malaysia's AmLife

* To buy 30 pct of Malaysia's AmLife business for 30 mln stg

* Shares down 2.5 pct (Adds details)

Nov 28 (Reuters) - UK insurer Friends Provident Plc (FP.L) said on Friday it agreed to take a 30 percent stake in Malaysia's AmLife Insurance Berhad business for 30 million pounds ($46.27 million) in cash to expand its business.

AmLife will comprise the life assurance operations of AmAssurance, a life and general insurance joint venture of AMMB Holdings Berhad (AMMB.KL) and Insurance Australia Group Ltd (IAG.AX).

The company's shares were down 1.8 pence at 71.2 pence at 1322 GMT on the London Stock Exchange. ($1=.6483 Pound) (Reporting by Balachander Surianarayanan in Bangalore; Editing by Tresa Sherin)