Trane owner takes name, to sell plumbing business

Associated Press

NEWARK, N.J. – American Standard Cos. said Thursday it will sell its well-known plumbing fixture business and spin off a unit that makes auto braking systems, then rename the company Trane after its signature brand of air-conditioning systems.

Wall Street applauded the breakup, sending the stock rising more than 7 percent to $53.25, its highest level since the company went public in 1995.

Although American Standard, based in Piscataway, N.J., is best known for its kitchen and bath products, the Trane operation brought in $6.8 billion, or 60 percent of its sales in 2006.

Trane is among the leading suppliers of commercial and residential heating, ventilation and air-conditioning systems. The new Trane company will retain the right to use the American Standard brand name for such products.

Trane on Wednesday announced plans to invest nearly $3.4 million into expanding its Fort Wayne operations, including a warehouse.

Trane’s vehicle control systems business, which posted $2 billion in revenue in 2006, will be spun into a publicly traded company to be called WABCO. American Standard shareholders will be issued one share of WABCO stock for every three American Standard shares currently owned.

American Standard also said it will sell its bath and kitchen business, which generated $2.4 billion in revenue in 2006. The company plans to use proceeds from that sale to pay down debt and buy back Trane common stock.

The breakup, which does not require shareholder approval, is to be completed by early fall.