American Standard to Separate Its Three Businesses
Feb 5, 2007
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American Standard Companies Inc. announced that its board of directors has completed a strategic review of the company and unanimously approved a plan to separate its three businesses this year.

"The board has concluded that separating American Standard into three focused, better understood companies will create greater shareowner value than the current structure," said Fred Poses, chairman and CEO. "The businesses have the size, global reach, industry leadership, and organizational talent to succeed as separate companies."

Upon completion of the plan, American Standard will focus on its global market-leading air conditioning systems and services business with 2006 sales of U.S. $6.8 billion and will change the company's name to Trane, the company's flagship air conditioning brand. The company plans to spin off its global vehicle control systems business with 2006 sales of $2.0 billion as an independent, publicly traded company, expected to be known as WABCO. It plans to implement the spinoff through a tax-free stock dividend of all WABCO common stock to American Standard shareowners, who would receive one share of WABCO common stock for every three shares of American Standard common stock currently owned. In addition, American Standard plans to sell its bath and kitchen business with 2006 sales of $2.4 billion. The company expects to complete both the spinoff of WABCO and the sale of Bath and Kitchen by early fall of this year.


The sales process for the company's bath and kitchen business is expected to begin this month. Proceeds from the sale are expected to be used to reduce the liabilities of the remaining company (Trane) and to repurchase Trane's common stock.

Until the sale and spinoff are completed, American Standard expects to continue to pay its quarterly dividend of 18 cents per share. Trane and WABCO are expected to have capital structures and financial policies consistent with investment grade ratings. The company expects that Trane and WABCO will initially pay dividends that in total approximate the dividend currently paid by American Standard. However, once WABCO is spun off, its board will determine its dividend policy.

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