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“The board has concluded that separating American Standard into three focused, better understood companies will create greater share-owner 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 air conditioning systems and services business, changing the company’s name to Trane, its flagship air conditioning brand. The company plans to spin off its global vehicle control systems business as an independent, publicly traded company, expected to be known as WABCO.
In addition, American Standard plans to sell off the Bath and Kitchen business. The company expects to complete both the spinoff of WABCO and the sale of Bath and Kitchen by early fall of this year. “Looking to the future, our board concluded that the separation plan is the best way to enhance shareowner value,” said Poses. “Operating separately, the businesses will benefit from greater strategic focus, increased market recognition, improved capital flexibility, and an increased ability to attract, retain, and motivate employees.”
Trane’s headquarters will remain in Piscataway, N.J., and the company will continue to trade on the New York Stock Exchange (NYSE) using a new stock symbol to be announced later. The company will retain the right to use the American Standard brand name for its HVAC products. Completion of the proposed separation is subject to final approval by American Standard Companies’ board of directors.
When implemented, the separation plan will not trigger “change-in-control” accelerated benefits for any officers or employees of the company.
Poses will continue as chairman and CEO through 2007 as planned, and an internal and external search is under way for his successor. The current directors of American Standard Companies, with the exception of lead director Jim Hardymon, are expected to continue as board members of the company when it changes its name to Trane. Hardymon, in accordance with the company’s governance guidelines, will retire from the board in May 2007, and will serve as WABCO’s nonexecutive chairman. Leaders of Air Conditioning Systems and Services, Craig Kissel, president of commercial systems, and Dave Pannier, president of residential systems, will continue in their roles.
Publication date: 02/12/2007