Citigroup’s Primerica Is Said to Seek Bids for Marketing Arm

(Bloomberg) -- Executives at Citigroup Inc.’s Primerica Financial Services unit have approached private-equity firms including J.C. Flowers & Co., Blackstone Group LP, and TPG Inc. to gauge their interest in buying the division’s 100,000- person sales arm, said four people familiar with the matter.

The executives started the talks after Citigroup failed to find a buyer for the entire life insurance company in the past year, said the people, declining to be identified because the talks aren’t public. Citigroup, the recipient of a $52 billion government bailout, hasn’t endorsed the plan, the people said.

Citigroup canceled Primerica’s annual sales convention and a trip to the Bahamas for top agents after the government rescue last year. Primerica is part of Citi Holdings, created by Citigroup Chief Executive Officer Vikram Pandit to house “non- core” units that he wants to eventually sell or wind down as he undoes the legacy of former CEO Sanford “Sandy” Weill.

Citigroup spokesman Stephen Cohen declined to comment. Blackstone and TPG declined to comment through spokespeople, and J. Christopher Flowers, founder of the private equity firm that bears his name, didn’t return a call seeking comment. Primerica’s co-CEOs, John Addison and Rick Williams, declined to comment through spokesman Mark Supic.

Addison told employees in January that he planned to remove any reference to the parent company on Duluth, Georgia-based Primerica’s business cards, brochures, and marketing materials.

New Insurer

In one plan under discussion, the marketing arm would split from Citigroup and start selling policies backed by a new insurer, while Citigroup would retain assets and liabilities from Primerica policies that have already been sold, two of the people said. A transaction wouldn’t yield Citigroup much cash because there are few tangible assets associated with the marketing arm, they said.

Founded in 1977 by Arthur L. Williams, Primerica sells life insurance and investment products such as mutual funds through a mostly part-time sales force of independent agents. Weill’s Commercial Credit Corp. took control of the firm in 1988, using it as a platform to assemble the financial-services titan eventually known as Citigroup.

The division had $2.2 billion of sales last year and net income of $355 million, according to a fact sheet provided by the company.

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