PISCATAWAY, N.J. - 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. American Standard will spin off its vehicle control systems business, sell its bath and kitchen business, and focus on its global HVAC business, renaming the company Trane.

"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 air conditioning and heating systems business with 2006 sales of $6.8 billion and will change the company's name to Trane, its flagship brand. The company plans to spin off its global vehicle control systems business with 2006 sales of $2 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 the bath and kitchen business by early fall of this year.

"We've come a long way since the company went public in 1995," said Poses. "Over the past 12 years, we've generated average annual total shareowner returns of about 18 percent. Over the past seven years, we reduced our debt by more than $1 billion, achieved investment grade ratings, and established our quarterly dividend and subsequently increased it. At the same time, we invested in our businesses to strengthen their overall capabilities.

"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."

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.

The company’s headquarters will remain in Piscataway, N.J., and the firm 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.

Publication date:02/05/2007