NEW YORK -(Dow Jones)- Citigroup Inc. (C) took another step to right itself, announcing plans to divest a business that has long been seen as a poor strategic fit.




Citi said it announced an initial public offering for Primerica Inc., which sells mainly term-life-insurance policies and other investment and deposit products, and refers loans to Citi.



Primerica was a building block of Sanford "Sandy" Weill's legendary--and now notorious--empire that Chief Executive Vikram Pandit is now trying to whip into shape. But Primerica had been an early target for divestiture, though no buyer was found.



Earlier this year, Pandit decided to separate businesses that don't fit with his focus on retail, commercial, and investment banking into a separate division, Citi Holdings. Primerica was one unit that didn't fit with Pandit's vision of banking.



Citi approached several private-equity firms about the potential purchase of the unit. It said it intends to divest its remaining interest in Primerica after completion of the offering.



"We believe [the IPO] is the best separation alternative for this franchise," Citi Holdings Chief Executive Michael Corbat said in a press release.



Corbat had said Citi has some flexibility in divesting Citi Holding's business. It formed a joint venture with Morgan Stanley for Citi's Smith Barney brokerage business; it sold a string of consumer finance operations in Europe and its Japan brokerage and asset-management businesses.



"Today's announcement represents an important step in simplifying our organization and demonstrates our continued success in finding solutions for Citi Holdings," Corbat said.



The bank wouldn't say how much it expects in proceeds, or how much it would own after the IPO, only that up to an estimated $100 million of stock would be sold.



Primerica, which has about 100,000 sales representatives, offers life insurance and investment products such as mutual funds and targets middle-income households.



In the first half of 2009, it had earnings of $244.7 million on revenue of $ 1.09 billion, down from $269.1 million and $1.19 billion, respectively.



Through reinsurance arrangements covering insurance policies in place as of Dec. 31, Citi said it will continue to receive a "significant stream of income" from Primerica.


http://money.cnn.com/news/newsfeeds/articles/djf500/200911051815DOWJONESDJONLINE000984_FORTUNE5.htm