Among the first steps that Sandy Weill took as he began building Citigroup, Inc. (C) was the purchase of insurance company Primerica. Tonight, the financial services giant will price an 18-million share spin-off of Primerica, expected to be in the range of $12-$14/share. The spin-off is expected to generate about $250 million for Citi, with another 2.7 million shares available if demand is strong.

Primerica’s revenue topped $2 billion in 2009, and net income totalled $495 million. The company offers life insurance to relatively small policyholders through a network of more than 100,000 self-employed salespeople.

Citi also plans to sell more than 17 million shares and warrants for an additional 4.3 million shares of Primerica to Warburg Pincus for about $330 million. The parent will also receive a dividend of $454 million from the newly spun-off Primerica.

The nearly $1 billion total gain is expected to be partly offset by a one-time loss because Citi is selling Primerica at below book value. Citi’s goal is to treat the new Primerica as a separate business for accounting purposes, wiping some $2 billion in assets from Citi’s balance sheet. The bank holds some $540 billion in what regulators and investors consider non-core assets, and while $2 billion is a tiny portion of that total, Citi is at least moving in the right direction.

The announcement comes just one day after the U.S. Treasury said that it would begin selling its 27% stake in Citi before the end of 2010. US taxpayers own about 7.7 billion shares of Citi, and the sale could result in a gain of about $8 billion at current share prices.

Earlier in the week, Citi announced that it was expanding its hedge fund servicing operation, Global Prime Finance Group, by hiring 13 new people for its New York and London offices. The bank is looking for significant growth in its hedge fund business going forward.

And on the acquisition side of the ledger, Citi might also be getting into the music business. According to the New York Times, EMI has quit talks with Sony Music and Universal over North American licensing rights. EMI’s parent company, private equity group Terra Firma, could be seized by Citi, Terra Firma’s major creditor.

Citi is speeding up its sales of non-core businesses and that is a very good thing for the bank and its investors, including U.S. taxpayers. Now it just has to avoid the sinkhole known as the music business.

Tell us what you think here.

Related Articles:

• How the Five Biggest Stocks on Wall Street Measure Up (XOM, MSFT, BHP, WMT, AAPL)
• Compass Minerals CMP – A Company Worth Its Salt
• More Reasons the Bulls are Back