"We believe that the food and tobacco businesses will best be able to achieve their full potential under separate ownership structure," said Steven Goldstone, chairman-CEO. "Each is a large, complex business with very different challenges, strategies and means of doing business."Today's move reflects pressure from shareholders, namely financier Carl Icahn, a 7.7% owner, who have argued that financial drains on the tobacco business have depressed the vitality of the company's cookies and crackers operations. Under the new structure, RJR Nabisco will continue to exist as a holding company (but will be renamed Nabisco Group Holdings). It will own 80.6% of Nabisco Holdings Corp.
With the spinoff of its international business, R.J. Reynolds Tobacco Co. is left with $5.6 billion in domestic sales, No. 2 to Philip Morris Cos., with cigarette brands including Camel, Salem and Winston.
Copyright March 1999, Crain Communications Inc.