British life insurer Phoenix buys Sun Life UK for $300 million, ups dividend

LONDON (Reuters) - Phoenix has bought closed life insurer Sun Life of Canada UK for 248 million pounds ($301 million) in cash and is raising its dividend, the British life insurer said on Thursday.

Phoenix specialises in buying and operating books of life insurance businesses which are closed to new customers.

The deal enables Phoenix to offer a 2.5% dividend increase payable from its 2022 final dividend, the FTSE 100 insurer said in a statement.

The purchase is expected to deliver around 470 million pounds of long-term cash generation, and Phoenix said it was targeting 125 million pounds of cost savings from the deal.

"The acquisition of Sun Life UK is highly attractive for Phoenix Group and demonstrates the significant value that smaller cash-funded M&A transactions can deliver for our shareholders," Phoenix CEO Andy Briggs said.

Phoenix said M&A "remains an ongoing strategic priority".

($1 = 0.8231 pounds)

(Reporting by Carolyn Cohn; editing by Jason Neely)