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Maker of Jim Beam, Titleist to Split

Consumer products maker Fortune Brands Inc. plans to split into three separate companies, keeping its liquor business led by Jim Beam bourbon while shedding the maker of Titleist golf balls and its home and security products business whose brands include Moen faucets and Master Lock.

Fortune Brands said Wednesday it will focus on its spirits business which generates annual revenue of $2.5 billion and also includes brands such as Canadian Club and Maker's Mark.

The home and security business which also includes MasterBrand cabinets will be spun off on a tax-free basis to shareholders, while the golf business which also includes FootJoy golf shoes and gloves will be either spun off or sold.

The move had reportedly been in the works since activist shareholder William Ackman's Pershing Square Capital Management became the largest shareholder of the Deerfield, Ill., company.

Fortune Brands said its management will develop separation plans for the board to consider and approve, and it expects to complete planning within several months. The separation is subject to conditions including regulatory approvals.

The company said the plan is the result of its ongoing strategic review over the past four years.

"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," Bruce Carbonari, chairman and chief executive, said in a statement. "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."

In the third quarter ended in September, the company reported its net income fell 17 percent because of one-time charges and the expiration of the homebuyer tax credit. Revenue rose less than 1 percent.

Shares of Fortune Brands closed Tuesday at $61.15. The stock is up nearly 42 percent in the year to date and has rallied 18 percent since early October when Pershing's stake was first reported.

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