Citigroup Inc. announced Friday that its distribution subsidiary, Primerica, Inc. will be spun off in an initial public offering.

Primerica has filed a registration statement with the U.S. Securities and Exchange Commission for an IPO. All of the shares to be sold in the offering will be sold by Citi, and Citi will receive all of the proceeds from the IPO. After completion of this offering, Citi intends to divest its remaining interest in Primerica “as soon as is practicable, subject to market and other conditions.”

Rick Williams, Primerica co-CEO, said, “Becoming a public company is an opportunity to align the interests of our independent sales force and our employees with our future performance.”

“Today’s announcement represents an important step in simplifying our organization and demonstrates our continued success in finding solutions for Citi Holdings, our non-core businesses. We believe this is the best separation alternative for this franchise,” said Michael Corbat, CEO of Citi Holdings.

Citi notes that it will continue to receive an income stream from Primerica through reinsurance arrangements covering term life policies in place as of December 31, 2009.

IE