What was changed
In October 2010 Pershing Square's Bill Ackman bought an 11% stake, becoming Fortune Brands' largest shareholder. On December 8, 2010 the company announced a three-way separation: it would keep its $2.5 billion-revenue spirits business (Jim Beam, Maker's Mark, Canadian Club), spin off home & security (Moen, Master Lock, MasterBrand) tax-free, and either sell or spin off the golf business (Titleist, FootJoy).
The plan was executed over the following year: the golf unit was sold, and on October 3, 2011 Fortune Brands completed the spin-off of Fortune Brands Home & Security (NYSE: FBHS), with the remaining company renamed Beam Inc. (NYSE: BEAM); shareholders received one FBHS share per Fortune Brands share plus retained Beam stock.
What it achieved
Spirits became Beam Inc.; home & security (Moen, Master Lock) spun off tax-free as FBHS; golf (Titleist) divested—separation completed October 2011.
Why it worked
Pershing's 11% made the status quo politically untenable.
A tax-free spin gave shareholders a way to value each unit.
The split let spirits escape the conglomerate discount.
What can be applied
A 13D that names the conglomerate discount gives management a scripted exit; the split followed within two months of the stake's disclosure.
Aftermath
Beam traded as a pure-play spirits company until Suntory acquired it in 2014; Fortune Brands Home & Security grew as a standalone building-products firm, and Pershing Square's thesis was realized in two focused public companies.
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