UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
November 30, 1994 (November 30, 1994)
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Date of Report (Date of earliest event reported)
AMERICAN BRANDS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-9076 13-3295276
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
l700 East Putnam Avenue, Old Greenwich, Connecticut 06870-0811
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 698-5000
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<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
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Registrant's press release dated November 30, 1994 is filed
herewith as Exhibit 20 and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
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20. Press release of Registrant dated November 30, 1994.
This Current Report shall not be construed as a waiver of the
right to contest the validity or scope of any or all of the provisions of
the Securities Exchange Act of 1934 under the Constitution of the United
States, or the validity of any rule or regulation made or to be made under
such Act.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this Current Report to be
signed on its behalf by the undersigned thereunto duly authorized.
AMERICAN BRANDS, INC.
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(Registrant)
By Arnold Henson
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Arnold Henson
Executive Vice President and
Chief Financial Officer
Date: November 30, 1994
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EXHIBIT INDEX
Sequentially
Exhibit Numbered Page
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20. Press release of Registrant dated
November 30, 1994.
EXHIBIT 20
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FOR IMMEDIATE RELEASE
Contact: Roger W. W. Baker
(203) 698-5148
Daniel A. Conforti
(203) 698-5132
AMERICAN BRANDS ANNOUNCES DEFINITIVE AGREEMENT
TO SELL FRANKLIN LIFE INSURANCE
Old Greenwich, CT, November 30 -- American Brands, Inc. announced
today that it has executed a definitive agreement for the sale of
its Franklin Life Insurance business to American General
Corporation for which American Brands will receive $1.17 billion
in cash, which will be tax free. The transaction, which is
subject to antitrust and insurance regulatory approvals and other
customary conditions, is expected to close during the first
quarter of 1995.
In connection with this transaction, the Board has
authorized the purchase in the open market and in privately
negotiated transactions of up to 10 million shares of Common
stock, following the closing of the transaction. Such purchases
may be effected from time to time subject to market conditions.
Chairman and Chief Executive Officer William J. Alley said:
"We have been aggressively restructuring our operations to
enhance American Brands' presence as a consumer powerhouse with
leading market positions. Today's agreement marks another
dramatic milestone in that restructuring. In April, we announced
an agreement to sell The American Tobacco Company for $1 billion,
and clearance to proceed with that transaction is currently
before the courts. In July, we sold the Dollond & Aitchison
optical group for $146 million. Underlying these transactions is
a strategy focused on increasing shareholder value and enhancing
our long-term growth prospects.
"While Franklin Life does not fit with our sharpened focus
on branded consumer products, it is an outstanding company that
has performed well and has been very profitable. Thus, we are
particularly pleased that Franklin will become associated with a
quality organization focused exclusively on financial services.
"For American Brands and its stockholders, this is an
excellent deal, representing about 14 times Franklin's projected
1994 net income. We anticipate that, depending on market
conditions, the proceeds will provide funds to purchase shares
and, initially, to reduce debt. As opportunities arise, we
intend to further enhance the competitiveness and growth
prospects of American Brands through strategic acquisitions,
focusing on our long-term growth businesses -- hardware and home
improvement products, office products and golf and leisure
products -- and on distilled spirits. In the event that the
American Tobacco transaction closes, the Company would consider
similar redeployment of the proceeds.
"We further anticipate that, even though Franklin has been a
strong contributor to our consolidated income, the transaction
will have no material impact on the ability of the Company to pay
dividends. Effective with the June 1, 1994 payment, the dividend
on the Common stock was increased to an indicated annual rate of
$2.00.
"In connection with this agreement, our life insurance
business will be accounted for as a discontinued operation, and
prior periods' results will be restated. The estimated book loss
to be recorded in 1994, including provision for net income during
the phase-out period from November 30 through the anticipated
closing of the transaction, will be in the range of $220 million.
"Although a book loss will be recorded, the sale price of
$1.17 billion compares with an investment when we completed our
acquisition of Franklin in 1979 of approximately $645 million.
Through last year, Franklin had contributed a total of over $2
billion to operating income, and we had taken about $650 million
in cash dividends.
"If this sale and the proposed sale of The American Tobacco
Company are consummated, the new American Brands would consist of
profitable, strongly positioned companies that have performed
well. For the first nine months of this year, each of the major
businesses that would constitute the new American Brands achieved
increases in operating company contribution, and each is solidly
positioned with leadership positions in its markets. For the
year 1994, we now anticipate that even though earnings per share
including discontinued operations will show a decline reflecting
the book loss, earnings per share from continuing operations will
be comfortably ahead of 1993 earnings per share from continuing
operations (before accounting changes) of $2.67.
* * * * *
American Brands is a global consumer products holding
company. Major businesses include international tobacco,
distilled spirits, hardware and home improvement products, office
products and golf products as well as life insurance, which is
being sold, and domestic tobacco, whose pending sale is
undergoing judicial review. Each business has brand name leaders
in its industry.
The international tobacco business, Gallaher Tobacco, is the
number 1 tobacco company in the U.K. and has an expanding
presence on the European continent. Gallaher's major brands
include Benson and Hedges and Silk Cut.
In distilled spirits, leading brands include Jim Beam and
Old Grand-Dad bourbons, DeKuyper and Leroux cordials and
liqueurs, Glayva Scotch liqueur, Windsor and Lord Calvert
Canadian whiskies, Kessler American Blended Whiskey, Gilbey's gin
and vodka, Kamchatka, Wolfschmidt and Vladivar vodkas and Ronrico
rum along with The Dalmore, The Claymore, Whyte & Mackay Special
Reserve, and Isle of Jura Scotch whiskies. The MasterBrand
Industries hardware and home improvement business includes Moen,
Master Lock, Aristokraft and Waterloo. The ACCO World office
products group includes Swingline, Wilson Jones, Day-Timers and
substantial international operations, including Rexel and
Twinlock. Specialty products include Titleist, Pinnacle and
Foot-Joy golf products and, in the U.K., Gallaher's Prestige
housewares line and Forbuoys retailing.
In the U.S., The American Tobacco Company's major brands
include Carlton, Pall Mall, Tareyton, Lucky Strike, Montclair,
Misty, Private Stock, Prime and Summit.
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11/30/94
