DEERFIELD, Ill. (AP) - Fortune Brands Inc. forged ahead in transforming itself into a standalone liquor company, announcing a deal Friday to sell its unit that makes Titleist golf balls to Korean investors including athletic company Fila Korea Ltd. for $1.2 billion.
Fortune's Acushnet Co. business is a giant in the golf industry. Titleist is the top-selling golf ball and a leader in golf clubs, while the unit's FootJoy brand is the leader in golf shoes, the company said.
The Acushnet unit's revenue exceeded $1.2 billion in 2010, with nearly half of that coming outside the U.S., the company said. Operating income before charges was $80 million last year, it said.
Fila executives predicted strong growth opportunities in Asia for the golf brands.
The deal is a major step in Fortune's plan to break itself up. It plans to separate its Beam liquor business and its home and security businesses into two companies later this year.
"This transaction is a very important milestone as we execute out proposed plan to separate our three strong businesses for the purpose of maximizing long-term value for our shareholders," said Fortune Brands' Chairman and CEO Bruce Carbonari.
Fortune expects to reap $1.1 billion after taxes and expenses when the deal closes this summer.
The company, based in Deerfield, Ill., announced late last year that it was splitting into three companies, keeping its liquor business led by Jim Beam bourbon, while shedding units that make Titleist golf balls, Moen faucets and Master Locks.
Fortune is the world's fourth-largest premium spirits business with brands that also include Canadian Club, Maker's Mark bourbon and Sauza tequila. The spirits business from its Beam Global Spirits & Wine subsidiary generated 2010 revenue of $2.7 billion in 2010.
"The proceeds from this sale will strengthen Fortune Brands' balance sheet and support strong capital structures for both Beam and Fortune Brands Home & Security as they look to the prospect of competing as independent companies later this year," Carbonari said.
Fortune said earlier this month that it had submitted filings with federal regulators as part of its proposed spinoff of its home and security business, which also includes MasterBrand cabinets.
The group buying the golf brands is led by Fila Korea and Mirae Asset Private Equity, Korea's largest private equity firm.
Gene Yoon, chairman and CEO of Fila Korea, said the acquisition will add "a stable of premiere world-class brands."
"With our extensive knowledge and reach in Asia, we believe that the Acushnet brands have incredible new opportunity for growth in the emerging markets in Asia," he said.