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The Fortune Brands Blowup Is Almost Complete

By Travis Hoium | More Articles
August 29, 2011 | Comments (0)

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Who would have thought that liquor, golf clubs, and locks made for a poor business combination? After testing that odd matchup for a while, Fortune Brands (NYSE: FO  ) has finalized the details of its own dismantling.

In late July, Fortune completed the sale of Acushnet, the umbrella for the company's golf brands, including Titleist and FootJoy. Fortune sold the division for $1.225 billion in cash to a group led by Mirae Asset Private Equity; it's using the cash to pay off debt.

The two remaining businesses, Beam and Home & Security, will be split into two separate public companies, expected to be effective Oct. 4.

The spirits business, which includes Jim Beam, Courvoisier, and Canadian Club, will be a pure play, competing with Brown-Forman (NYSE: BF-A  ) and Diageo (NYSE: DEO  ) . That stock will trade under the ticker "BEAM."

The Home & Security business now becomes the catch-all for Fortune's other brands, like Moen, Master Lock, Aristokraft, and more. When it begins trading on its own, it will be known as Fortune Brands Home & Security, the only company to keep the Fortune name. Its stock will trade under the ticker "FBHS" on Oct. 4.

The security business will compete with companies like Masco (NYSE: MAS  ) for home-improvement market share and space in Home Depot (NYSE: HD  ) and Lowe's (NYSE: LOW  ) warehouses.

After being in a hodgepodge company under Fortune Brands, it will probably be good for each company's management to split off onto its own.

What shareholders will get
Fortune Brands shareholders will receive one share of each of the new companies when the split is completed. The ticker "FO" will be discontinued.

It's been a fun run for Fortune Brands' experiments with gold, spirits, and home & security products. But the new structure makes a lot more sense for investors, and it'll give each division's management a chance to focus on its own particular strengths.

The Fortune Brands ticker won't be around for long, but you can use My Watchlist to keep track of competitors. When they start trading, you can also add Beam and Fortune Brands Home & Security to your Foolish list:

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

The Motley Fool owns shares of Diageo and Fortune Brands. Motley Fool newsletter services have recommended buying shares of Diageo, Lowe's Companies, Fortune Brands, and The Home Depot. Motley Fool newsletter services have recommended writing covered calls in Lowe's Companies. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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