American Brands Will Pay $602 Million for Acco World

American Brands Inc. said Monday that it will pay $602 million in cash for Acco World Corp., a move that will almost double the office products revenue of the diversified packaged consumer goods company.

It is the second major acquisition by American Brands in two months. In April, the Old Greenwich, Conn.-based company acquired the distilled spirits business of National Distillers & Chemical Corp. for $545 million.

Both moves fit American Brands’ long-term objective of strengthening and creating certain core businesses, said spokesman Brian Dobson.

The $29-a-share offer for Northbrook, Ill.-based Acco, which makes fasteners, paper clips, binders and punchers, is expected to bolster revenue from American Brands’ office supply group to nearly $600 million annually from $347 million, said William Alley, the company’s chairman and chief executive officer.

American Brands’ office supply products group includes Swingline Inc., one of the the world’s largest stapler makers, the office supply company Wilson Jones Co. and Ofrex PLC, a British office supply company and subsidiary of Gallaher Ltd.

American Brands, which earned $365 million last year on revenue of $8.5 billion, has three core businesses consisting of financial services, tobacco, and distilled spirits.

The Acco purchase goes a long way toward making the office supply area one of the company’s future core groups, Dobson said.

Last year, American Brands lost out to Anglo-Dutch consumer product giant Unilever NV in a bidding war over Chesebrough-Pond’s Inc., the maker of such well-known brands as Vaseline and Pond’s skin cream.

Acco, with major operations in the United States, Canada, Britain, Ireland and Holland, earned $23.2 million on revenue of $250 million for the fiscal year ended March 31.

The offer is not conditioned on any minimum number of shares being tendered, American Brands said. Each share of Acco that is not purchased by the company will automatically be converted into $29 cash.

Completion of the tender offer is contingent on obtaining an agreement to sell Acco’s stapling line, it said.

In trading on the New York Stock Exchange, Acco rose sharply to close up 4 7/8 at $28.375 and was the biggest percentage mover of the day on the Big Board. American Brands closed down 3/8 at $46.875.