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Lender Springleaf Holdings Inc. said it has agreed to sell about 127 branches in order to secure approval for its acquisition of Citigroup Inc.'s OneMain Financial business.

As part of the deal with the U.S. Department of Justice and seven state attorneys general, Springleaf will sell the branches to Lendmark Financial Services of Covington, Ga.

Springleaf said the branches represent 4% of the company's receivables on a pro forma basis.

Springleaf shares added 6.6% in late morning trading, while Citigroup shares were down about 0.9%.

Springleaf announced the $4.25 billion deal for OneMain in March, a combination expected to create a U.S. subprime giant.

In August, the company said the Justice Department voiced concerns about the deal, delaying its closing.

The deal had originally been scheduled to close by Sept. 30. Springleaf said Friday that it expects to receive approval and shortly, and it will close immediately after.

Getting rid of the OneMain unit has long been a goal for Citigroup. The bank put the subprime lender on the chopping block as early as 2009. In recent years, Citigroup has also jettisoned well-known names like the Smith Barney brokerage unit and life insurer Primerica as the firm tries to remake itself after the financial crisis.

Big lenders have been caught between trying to satisfy banking regulators who want them to shrink and antitrust regulators who want to preserve choice in the marketplace, which often diminishes with such deals. Citigroup's OneMain and Springleaf compete with each other in some markets.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

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(END) Dow Jones Newswires

November 13, 2015 11:45 ET (16:45 GMT)

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