American Brands to Buy Faucet Firm Moen Group

American Brands said Friday that its MasterBrand Industries Inc. unit agreed to acquire Moen Group Inc., a maker of kitchen and bathroom faucets, from the buyout firm Forstmann Little & Co. for $975 million in cash.

Forstmann Little, a private investment firm that has been involved in a string of deals this year, said it bought Moen’s predecessor, Stanadyne Inc., in March, 1988, for $840 million.

Analysts applauded the move by American Brands, a diversified tobacco company based in Old Greenwich, Conn., to build up its home products division, citing growth prospects for the business. Its stock rose $1 to $70.50 on the New York Stock Exchange.

“Strategically, it’s a great acquisition. It fits very well into their hardware and home improvement group,” said Roy Burry of Kidder Peabody & Co.

Moen has about 25% of the U.S. faucet market, Forstmann said. The deal is subject to government approval.

American Brands said in a statement that with the purchase of Moen, its hardware and home improvement products division will be a core business, joining its tobacco, distilled spirits and life insurance units.

“They want to diversify away from the cigarette business,” said Allan Kaplan, tobacco analyst at Merrill Lynch.

Kaplan said American Brands “paid a fairly good price” for Moen, but that the company wanted to tie its hardware and home products businesses together.