Fortune Brands, Inc., owner of several leading bourbon brands, today announced that its Board of Directors has unanimously approved in principle a separation of the company's three consumer businesses: distilled spirits, home and security, and golf products. "We are taking the next logical step in the evolution of Fortune Brands," said Bruce Carbonari, chairman and chief executive officer.
Many will say this move is long overdue. Fortune is one of the last examples of the diversified conglomerate model that lost its luster decades ago. Only the consistently strong performance of its distilled spirits business has delayed the inevitable.
A separation has been rumored many times but never so persistently as in the last few months, since Pershing Square Capital Management became the majority shareholder and began to push for a break-up.
The plan that the company intends to pursue includes the continuation of Fortune Brands as an independent, publicly-traded company focused solely on distilled spirits. It was not announced if the Beam Global Spirits and Wine name will be discontinued. Specific plans about how the new company will be structured have yet to be developed.
To shed its non-beverage businesses, Fortune will spin-off together all of its home and security businesses (Moen faucets, MasterBrand cabinets, Master Lock security products, etc.) into an independent, publicly-traded company; and either sell or spin-off its golf businesses (Titleist, etc.).
The company expects to announce detailed plans for the separation in a few months.
The new Fortune Brands as a pure-play premium spirits company will be the largest U.S.-based spirits company and the fourth largest premium spirits business in the world, with $2.5 billion in annual revenue.
In addition to the Jim Beam, Maker's Mark, and Knob Creek bourbon brands, the company has Canadian Club Canadian whisky; Laphroaig and Teacher's scotch; tequilas Sauza, Hornitos, and El Tesoro; Courvoisier cognac; DeKuyper cordials (USA only), Cruzan rum, EFFEN vodka and the Sourz cordials brand in Europe.
The bourbon whiskey company started in Kentucky just after Prohibition by Jim and Park Beam and their sons was acquired by American Brands (formerly American Tobacco) in 1967. American Brands went on to acquire other companies in other, unrelated businesses, sold off its tobacco interests, and changed its name to Fortune Brands. In 1987, it acquired the National Distillers Company and merged it with Jim Beam Brands, transforming that single-brand company into a full-line spirits producer. In 2005, it teamed up with Pernod-Ricard to acquire and divide the assets of Allied Domecq, which created the present Beam Global Spirits and Wine company.
Fortune Brands and Beam Global are based in the Chicago suburb of Deerfield.