Three years after using it as the vehicle for one of the biggest bank acquisitions in history,

Citigroup

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Chairman Sandy Weill plans to break up his Travelers insurance unit and sell part of it to the public.

Citigroup confirmed Wednesday it plans to sell 20% of Travelers Property Casualty in an initial offering early next year, then spin the remainder off to Citigroup shareholders. In addition to Travelers Property Casualty, Citigroup owns Travelers Life & Annuity.

The transaction is contingent on receipt of an IRS determination that such a spinoff would be tax-free. The tax implications of an outright sale are believed to have been what prevented Weill from simply auctioning the unit off to another company.

While a leader in its field and a generator of some $10 billion of annual premiums, the property-casualty unit has been blamed for Citigroup's relatively depressed stock-market valuation. Weill used Travelers to buy Citigroup for $70 billion in 1998, creating the country's No. 1 financial services firm.

In a press release, Citigroup said it expects to collect a $1 billion dividend from Travelers Property Casualty prior to the spinoff. Robert I. Lipp, a Citigroup director, was named chief executive of Travelers Property Casualty, a position he held before.