* Old Mutual will distribute 158.7 mln Nedbank shares to shareholders
* Post spin-off Old Mutual will hold 19.9 pct in Nedbank
* Nedbank to buy back shares from smaller shareholders (Adds CEO comment, Nedbank comment)
JOHANNESBURG, Sept 26 (Reuters) - South Africa's Old Mutual Ltd said on Wednesday its shareholders would get about 50 billion rand ($3.52 billion) from the spin-off of a majority stake in Nedbank and dividends.
The 173-year-old group has been dismantling its conglomerate structure, created after a series of acquisitions, since it moved its headquarters and primary listing to London in 1999.
Chief Executive Bruce Hemphill set the break-up in motion in 2016, saying the company's four main businesses - a U.S. asset manager, a British wealth manager, an African financial services division and a South African bank - would be valued more highly by investors as separate entities.
Old Mutual holds 52 percent of Nedbank and after the spin-off on Oct. 15 will hold around 19.9 percent, it said in a statement.
"Our intention is that we will hold onto the 19.9 percent for the long-term," Old Mutual Chief Executive Peter Moyo told investors during a conference call.
"We have negotiated for ourselves a very good commercial deal, so in the long term we think there is actually value that we will get from our long-term relationship with Nedbank."
Shareholders will receive 43.2 billion rand from the spin-off and 7.1 billion rand in interim and special dividends that will be paid on Oct. 16, the company said.
Old Mutual will distribute 158.7 million Nedbank shares to its shareholders, who will receive approximately 3.2 Nedbank shares for every 100 Old Mutual shares they own.
"The Old Mutual board believes that the Nedbank Unbundling continues to be in the best interests of Old Mutual shareholders as it allows investors to participate in the substantially different investment cases of Old Mutual and Nedbank," it said.
Shares in Old Mutual closed 1.29 percent higher at 30.60 rand, while Nedbank shares were 0.18 percent lower at 262.72 rand.
The Nedbank spin-off is the final step in the group's break up, which was mostly completed in the six months ended June 30.
The group returned to its South African roots in June when it listed its African financial services business in Johannesburg.
Nedbank said it looked forward to working with Old Mutual as a strategic minority shareholder. Nedbank, whose businesses include retail banking and asset management, said it was considering buying back its stock from shareholders who hold less than 100 Nedbank shares as soon as practicably possible following the spin-off.
Nedbank has estimated that after the spin-off, it will have a large number of shareholders, increasing from about 20,000 to 500,000. ($1 = 14.1893 rand) (Reporting by Nqobile Dludla, Editing by Louise Heavens, Mark Potter and Jane Merriman)