Bid for Corning Housewares Unit Pans Out

Corning Inc., known the world over for its pie plates, glass casserole dishes and ceramic pans, on Wednesday said it is selling its 82-year-old consumer housewares business to a New York investment firm.

AEA Investors Inc. beat out more than half a dozen rivals in signing a deal for an 89% stake in Corning Consumer Products Co., maker of Pyrex oven ware, Corelle dishes and Corning Ware pans.

Corning said the sale, expected to be completed late this year, involves a refinancing that will result in cash proceeds to Corning of about $975 million before taxes. Corning will retain an 11% interest.

The price for the struggling business surprised Wall Street analysts.

After taxes, “they’ll pick somewhere between $700 million and $750 million in cash, about $100 million more cash than I had in my forecast,” said Lissa Bogaty, an analyst with Prudential Securities Inc.

The company is turning its focus toward fiber optics and other high-technology businesses that are more profitable. Corning spun off its laboratory and pharmaceutical services businesses in January.

After two years of trying to turn around its housewares business, which has been buffeted by heightened competition in both upscale and low-end markets, Corning revealed in May its plans to sell the division.

The Corning glass company, which set down roots in 1867, entered the housewares business in 1915 with its invention of Pyrex bake ware and built up an array of widely known brand-name products.

But by last year, the underperforming unit accounted for just 17% of Corning’s $3.7 billion in annual sales. It employs 3,500 of Corning’s 20,000 employees worldwide, including 800 of the company’s 6,000-strong work force in Corning, N.Y.

Peter F. Campanella will remain president and chief executive of the housewares unit, which will retain its headquarters in Corning. But the new owner’s “usage of the Corning brand name will be phased out” after an indefinite period, said Corning spokeswoman Monica Ott.

AEA Investors was founded in 1969 as a private investment vehicle for wealthy families such as the Rockefellers and the Harrimans. Since then, it has expanded significantly, making controlling investments in market-leading companies on behalf of its investors.

Corning shares fell $1.63 to close at $59.38 on the New York Stock Exchange.