Fortune Brands to Break Up Company
Fortune Brands Inc. announces that its Board of Directors has unanimously approved in principle a separation of the company's three strong consumer businesses -- distilled spirits, home and security, and golf products.
The plan that the company intends to pursue includes: the continuation of Fortune Brands as an independent, publicly-traded company focused solely on its distilled spirits business; the tax-free spin-off to shareholders of the home and security business into an independent, publicly-traded company; and the sale or tax-free spin-off of the golf business.
According to a press release on the matter, each business has leading consumer brands and excellent growth and returns potential, and is now very well positioned to create significant value for shareholders on its own.
The Board has directed management to develop detailed separation plans for consideration and final approval by the Board. The company expects to complete development of these plans -- including the structure, timing, and other related matters for each business -- within the next several months.
"We are taking the next logical step in the evolution of Fortune Brands, which we believe will maximize long-term value for our shareholders and create exciting opportunities within our businesses," says Bruce Carbonari, chairman and chief executive officer of Fortune Brands. "While the breadth and balance of our portfolio have served shareholders very well, we see the potential for even greater value by separating our businesses into focused companies at a time when they have emerged from the economic downturn in such strong positions. We believe now is the right time to move ahead with this tax-efficient approach, and we're confident the course we've outlined today generates greater potential long-term value than all other alternatives."
About the Three Businesses:
Premium Spirits: The company's Beam Global Spirits & Wine, Inc. unit, with $2.5 billion in annual revenue, is the largest U.S.-based spirits company and the fourth largest premium spirits business in the world. Beam Global is the world leader in the growing bourbon category, led by the Jim Beam, Maker's Mark and Knob Creek brands. Global brands, including Canadian Club whisky and Laphroaig and Teacher's Scotch, further enhance the company's whiskey portfolio. With premier tequila brands including Sauza, Hornitos and El Tesoro, the company holds the No. 2 position in tequila worldwide. Courvoisier is one of the world's leading cognacs, and DeKuyper is the leading brand of cordials in the United States. The company is also growing rising star brands with strong upside potential, such as Cruzan rum, EFFEN vodka and the European Sourz cordials brand. A robust innovation pipeline that has recently produced impactful new products such as Red Stag by Jim Beam, Maker's 46, Cruzan 9, Courvoisier 12 and 21, Teacher's Origin in India and new ready-to-drink products in Australia, is further adding to the company's growth and future prospects.
Home & Security: Fortune Brands Home & Security LLC, with annual sales exceeding $3 billion, is a North American leader in its category. Its largest single brand is Moen, the No. 1 faucet brand in North America. MasterBrand Cabinets, which includes brands such as Aristokraft, Decor, Diamond, Omega and Kitchen Craft, is the strong No. 2 cabinet manufacturer in North America. Therma-Tru, the No. 1 entry door brand in the United States, and Simonton, a leader in energy-efficient vinyl-framed windows, are both well positioned in the attractive advanced materials segments of their categories. Master Lock is the world's No. 1 brand of padlocks and related security products, and Waterloo is a leader in storage and organization products.
Golf: With annual sales of $1.2 billion, Acushnet Company is the No. 1 golf company in the world. Acushnet is led by Titleist, the No. 1 ball in golf, and FootJoy, the No. 1 shoe and glove in golf. Titleist is also a leader in high-performance golf clubs, and FootJoy is growing strongly in the performance outerwear category. New-product innovations, including successive generations of the Pro V1 golf ball plus advanced technology clubs and shoes, and investments in high growth international markets, have enabled the company to outperform the market on growth and returns and position it well for substantial upside in a category with favorable long-term demographics.
In addition to final Board authorization, the potential separation of Fortune Brands' companies will also be subject to the receipt of a number of customary regulatory approvals and/or rulings, the execution of intercompany agreements and finalization of other related matters.