Corning sells housewares division

August 21, 1997

CORNING, N.Y. (AP) - Corning Inc., known the world over for its pie plates, glass casserole dishes and ceramic pans, said Wednesday it is selling its 82-year-old consumer housewares business to a New York investment firm.

AEA Investors Inc. beat out more than half a dozen rivals in signing a deal for an 89 percent stake in Corning Consumer Products Co., maker of Pyrex ovenware, Corelle dishes and Corning Ware pans.

Corning said the sale, expected to be completed late this year, involves a refinancing that will result in cash proceeds to Corning of about $975 million before taxes. Corning will retain an 11 percent interest.

No word on area impact

Corning employs more than 850 workers at two plants in the Tri-State area.

Included are 350 workers in the Inwood, W.Va., plant, which makes Corning and Visions cookware, and more than 500 in Greencastle, Pa., which is a distribution center for Corning's East Coast manufacturing plants.


Corning officials could not be reached for comment on how the sale would affect area workers.

The price for the struggling business surprised Wall Street analysts.

After taxes, "they'll pick somewhere between $700 million and $750 million in cash, about $100 million more cash than I had in my forecast," said Lissa Bogaty, an analyst with Prudential Securities Inc.

The company is turning its focus toward fiber optics and other high-technology businesses that are also more highly profitable. Its spun off its laboratory and pharmaceutical services businesses in January.

After two years of trying to turn around its housewares business, which has been buffeted by heightened competition in both upscale and low-end markets, Corning revealed its plans to sell it in May.

82-year-old tradition

The Corning glass company, which set down roots in this western New York town in 1867, entered the housewares business in 1915 with its invention of Pyrex bakeware and built up an array of widely known brand-name products.

But by last year, the underperforming unit accounted for just 17 percent of Corning's $3.7 billion in annual sales. It employs 3,500 of Corning's 20,000 employees worldwide, including 800 of the company's 6,000-strong work force in Corning.

Peter F. Campanella will remain president and chief executive officer of the housewares unit, which will retain its headquarters here. But the new owner's "usage of the Corning brand name will be phased out" after an indefinite period, said Corning spokeswoman Monica Ott.

Corning said it will invest the proceeds in its advanced materials, communications and environmental businesses. Corning's biggest and fastest-growing business is its manufacture of optical fiber, optical cable and photonic components.

"They will very likely take the cash and buy companies in photonics," Bogaty said. "This gives them a better war chest."

AEA Investors was founded in 1969 as a private investment vehicle for wealthy families such as the Rockefellers and the Harrimans. Since then, it has expanded significantly, making controlling investments in market-leading companies on behalf of its investors.

Staff Writer Lisa Graybeal contributed to this story.

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