Citigroup Inc. and State Street Corp. announced that they have entered into a definitive agreement to sell CitiStreet, a benefits servicing business, to ING Group in an all-cash transaction valued at US$900 million.

CitiStreet is a joint venture formed in 2000, which is owned 50% each by Citi and State Street. The firm provides a range of recordkeeping and administrative services to more than 16,000 plans and 12 million participants. Headquartered in Quincy, Mass., CitiStreet has more than US$262 billion in assets under administration as of March 31, 2008 and approximately 3,700 employees.

Citi said the sale is consistent with its focus on divesting non-core assets and strategically reallocating capital throughout the organization. The acquisition is expected to close by the end of the third quarter of this year.

“CitiStreet is an industry leader, but retirement plan record keeping and administrative services are not strategic priorities for us,” said Charles Johnston, president of Citi Global Wealth Management. “Smith Barney remains committed to serving corporate and business clients with retirement plans and other institutional offerings and we will work closely with ING and State Street to ensure an orderly transition for clients and employees.”

“In the eight years since its launch, CitiStreet has had steady growth and become a leading benefits servicing provider,” said Ronald Logue, chairman and CEO, State Street. “This transaction recognizes the strong business we built while enabling us to focus resources on businesses that are more closely aligned with our long-term strategy.”