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
December 19, 1996 (December 19, 1996)
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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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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
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Registrant's press release dated December 19, 1996 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 December 19, 1996.
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 Gilbert L. Klemann, II
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Gilbert L. Klemann, II
Senior Vice President
and General Counsel
Date: December 19, 1996
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EXHIBIT INDEX
Sequentially
Exhibit Numbered Page
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20. Press release of Registrant dated
December 19, 1996.
EXHIBIT 20
Media Relations: Investor Relations:
Roger W. W. Baker Daniel A. Conforti
(203) 698-5148 (203) 698-5132
AMERICAN BRANDS ANNOUNCES PLANS TO CONSOLIDATE PRODUCTION
AT ITS GALLAHER TOBACCO UNIT
Old Greenwich, CT, December 19, 1996 -- American Brands, Inc.
(NYSE-AMB) today announced a major initiative to enhance
productivity.
The Company said that its U.K.-based Gallaher tobacco
subsidiary will consolidate U.K. cigarette manufacturing at its
factory at Lisnafillan, Northern Ireland. The program will
result in the closure over the next three to four years of its
Hyde factory in Manchester, England. Gallaher anticipates that
the consolidation, when completed, will result in substantial
annual savings. In the fourth quarter, American Brands will
record a restructuring charge of approximately $80 million
dollars (about $55 million after tax), primarily related to
employee termination benefits.
American Brands announced in October plans to spin off
Gallaher to stockholders. Completion of that transaction is
contingent upon receipt of favorable tax rulings and relevant
stockholder approvals. The transaction is expected to be completed
in the second or early in the third quarter of 1997. When the
spin off is completed, the name "American Brands" will be changed
to "Fortune Brands."
Gallaher also indicated that it plans to invest an
additional 40 million pounds over the next three to four years in
expanding the Lisnafillan factory and installing the latest
generation of ultra-high speed cigarette manufacturing machinery.
The closure of the Hyde factory will result in the
elimination of about 950 positions, partly offset by the creation
of about 300 new jobs in Lisnafillan.
American Brands' Chairman and Chief Executive Officer Thomas
C. Hays noted that "Gallaher is the U.K. tobacco market leader
and has a significant and growing presence in continental Europe.
The plan announced today will result in substantially lower costs
for Gallaher, enhancing its competitive position and strategic
flexibility.
"We are firmly committed to reducing our overall cost
structure, not only at Gallaher, but also at the operations that
will comprise Fortune Brands. In that regard, we are currently
reviewing other productivity-enhancing opportunities at the
Fortune Brands operations that may well result in an additional
restructuring charge prior to the spin off.
"Today's announcement also represents another major step in
our aggressive strategy to enhance shareholder value. In
December 1994, we sold The American Tobacco Company. In 1995, we
sold Franklin Life and a number of nonstrategic businesses and
product lines, including the U.K. retailing operations. Early
this year, we acquired Cobra Golf, substantially enhancing our
worldwide leadership in the fast-growing golf business. We've
also invested $1.8 billion during 1995 and 1996 to reduce fully
diluted shares by 20%, and we have invested over $400 million in
capital projects to further enhance the competitiveness of our
powerful consumer brands."
Hays further commented that, excluding the restructuring
charge announced today, American Brands still expects to achieve
its previously announced E.P.S. growth target for 1996 in the
range of 10%.
Gallaher's Chairman Peter Wilson noted that Gallaher has
been moving vigorously to rationalize facilities. Two years ago,
cigar production facilities were consolidated into a single
factory and a state-of-the-art national distribution facility was
opened; previously, there were eight regional centers. With
actions taken prior to today's announcement, Gallaher has reduced
total employment by 37% over the past six years.
Wilson added that "by consolidating our two U.K. cigarette
factories into one and investing in the most modern, ultra-high
speed cigarette manufacturing machinery, Gallaher will achieve
significantly lower overhead costs and make an important
improvement in production efficiency."
The expansion of the Lisnafillan facility will provide
Gallaher with a production capacity of up to 50 billion
cigarettes annually.
American Brands, Inc. is an international consumer products
holding company with headquarters in Old Greenwich, Connecticut.
As noted, American Brands intends to change its name, following
the successful consummation of the spin off of Gallaher, to
Fortune Brands.
American Brands' operating companies have powerhouse brands
and leading market positions. MasterBrand Industries has leading
hardware and home improvement brands including Moen faucets,
Master locks and Aristokraft cabinets. Major distilled spirits
brands sold by units of JBB Worldwide, Inc., include Jim Beam and
the Small Batch Bourbons, DeKuyper cordials, After Shock liqueur
and Whyte & Mackay Scotch. Acushnet Company's golf brands
include Titleist, Cobra, Pinnacle and Foot-Joy. ACCO World
Corporation's major office products brands include Day-Timer and
Swingline. Gallaher Limited sells tobacco products
internationally, principally in Europe, where its major brands
include Benson and Hedges and Silk Cut.
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This press release contains statements relating to future
results, which are forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those projected as a
result of certain risks and uncertainties, including but not
limited to changes in general economic conditions, foreign
exchange rate fluctuations, competitive product and pricing
pressures, the impact of excise tax increases with respect to
international tobacco and distilled spirits, regulatory
developments, the uncertainties of litigation, as well as other
risks and uncertainties detailed from time to time in the
Company's Securities and Exchange Commission filings.
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