16 March 2005 – Lincolnshire & Northbrook (IL): Fortune Brands has announced that it is spinning off its Acco World OP unit to shareholders and that Acco will merge with General Binding Corporation (GBC) to create the world’s largest supplier of branded office products.
The new company, which will be called Acco Brands Corporation, will be headed up by Acco World president/CEO David Campbell as chairman/CEO. Acco World’s CFO, Neal Fenwick, will take the CFO role. The board will comprise nine members, including Fortune Brands’ chairman/CEO Norm Wesley, and three additional members of the Fortune board. Three members of GBC’s board will also join the Acco Brands board.
Commenting on the deal, Wesley said: "We believe this is a win-win-win for Fortune Brands, Acco and GBC that will better position each company for long-term growth and deliver greater value to our respective shareholders. We considered a range of alternatives for Acco, and we believe this spin-off and merger maximise value for shareholders."
Campbell commented: "Acco and GBC are an excellent strategic fit, and we’re excited about our growth opportunities as a combined independent, publicly traded company. Notably, the combined company will benefit from significant operating synergies. We expect annual cost savings to reach $40 million over the next three years, a portion of which we plan to reinvest in the business."
And GBC’s chairman and president/CEO Dennis Martin added: "We’re very excited about the prospects of being a significant part of Acco Brands Corporation, and we’re confident that combining these two complementary companies to make a larger, stronger one makes perfect strategic sense.
Fortune Brands originally looked to sell its Acco unit five years ago, but performed a u-turn in the face of a weakening US economy.
Upon completion of the simultaneous spin-off and merger, which is expected in the summer, shareholders of both Fortune Brands and GBC will receive shares in the new company. It is anticipated that the new company will float on the NYSE.
Fortune shareholders will own 66 per cent of the new company, with GBC shareholders owning 34 per cent.