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Fortune Brands Inc. (FO) announced its intention to split the company into three separate parts, giving investors pure plays in golf, home products and alcoholic drinks.

The company revealed that it would spin off its home and security business to shareholders in a tax-free transaction. Fortune Brands also plans to either spin off or sell its golf business. The home and security business earns revenue from products such as Moen faucets and Master locks while the golf division owns brands like Titleist.

Consequent to the spin-off, the company will continue to subsist as a publicly traded manufacturer of distilled spirit. This unit has parented brands like Jim Beam bourbon, Courvoisier cognac and Sauza tequila.

The radical separation has been the outcome of four years of strategic evaluation conducted by Fortune’s board and management. The declaration comes just after two months of an activist investor, William Ackman, disclosing its double-digit stake in the company. William unveiled an 11.0% stake in the company on October 8, 2010. He owns 16.7 million shares of Fortune Brands, which he bought for a total price, including brokerage commissions, of $764,757,471 and 603,486 notional shares underlying swaps.

Fortune Brands looks forward to clinching its strategic restructuring plan, which includes a spin-off or sale and any other related issue for each one of the concerned businesses, within the next several months.

Fortune’s spirit business is the second largest revenue generator for the company, with $2.5 billion in annual revenue while its home and security ($3 billion) and golf businesses ($1.2 billion) hold the first and third positions, respectively. Fortune Brands believe the restructuring would unlock greater value of the portfolio.

Fortune Brands is the largest spirits company in the U.S. and the fourth largest in the world. It competes head to head with Diageo plc (DEO), the world’s leading spirit company, Pernod Ricard, the second largest company in the world for spirits and privately held Bacardi, the third largest company in the world for spirits.

Fortune Brands’shares maintain a Zacks #4 Rank, which translates into a short-term ‘Sell’ recommendation. Our long-term recommendation on the stock remains ‘Neutral’.

Source: Three-Way Split for Fortune Brands