British Giant Hanson Plans Breakup Into 4 Companies
U.S.-British industrial giant Hanson said Tuesday that it will split into four companies in a bid to streamline its business and boost profits.
The move completes a breakup that began last year, when Hanson spun off 34 U.S. businesses with sales of about $3 billion to form U.S. Industries Inc.
The four companies will cover the areas of energy, chemicals, tobacco, and building materials and equipment.
The energy company will be called Energy Resources and will include British utility Eastern Energy and Peabody Coal, the largest U.S. coal miner.
Another unit, Hanson Industries, will include Cleveland-based Quantum Chemicals, SCM Chemicals and Glidco.
The third company, Imperial Tobacco, is Britain’s second-biggest tobacco company. It reported $522 million of operating profit in fiscal 1995.
Shares of those three companies will be listed separately, while the construction supply unit--Britain’s biggest building materials company--will retain both the Hanson name and its listing in London and New York.
Hanson’s move marks the latest in a string of recent corporate breakups, such as those of AT&T; Corp., ITT Corp. and Britain’s mining and hotels group Lonrho. Thorn EMI also plans to split up.
Lord James Hanson said that dividing the companies, each of which would be big enough in its own right to join the benchmark FTSE-100 index, would help them develop independently.
“We are making this exciting and radical move to create even greater management and growth opportunities, to improve the operations, profitability and long-term prospects of the companies in their own right,” he said.
The new companies are also intended to “improve the operations, profitability and long-term prospects of these four major businesses, which will become substantial public companies in their own right,” he added.
The tobacco and chemical units, which had 1995 operating profit of $580 million and $890 million, respectively, are expected to be split by the end of September.
The listing of the energy arm, which made a profit of $690 million, is expected to follow before the end of the year.
The deal represents Lord Hanson’s final, sweeping move before retiring from the board in 1997 at age 75, after having built up the $17.1-billion conglomerate with Sir Gordon White, who died last year, through a series of aggressive takeovers in the 1980s. Hanson is Britain’s 16th-largest company.
Its American depositary receipts shares climbed 89 cents to $16.64 in New York Stock Exchange trading.