But at an investor conference last month, Masco’s new chief executive, Keith Allman, hinted that the company might have too many brands and divisions. He said he is reviewing Masco’s multiple business lines and considering strategies to boost Masco’s value.
…
In an interview this week, Mr. Allman said he hasn’t yet made any major decisions about Masco’s many businesses but indicated that big changes are ahead for the 85-year-old company.
“I view myself as a transformational leader,” said Mr. Allman, who joined Masco in 1998 and oversaw its plumbing and North American cabinet divisions before his promotion to CEO in January. “That’s how the board views me, and that’s why they appointed me. I’m not a status-quo guy.” He said possible changes could include divestitures, acquisitions, internal integrations or stock buybacks.
What divisions might be leaving the fold? The WSJ speculates
Many Wall Street analysts predict that Masco, based in Taylor, Mich., will make a move next year at the earliest, perhaps by divesting its cabinet-manufacturing division or the installation-services division that caters to home builders. Both divisions posted operating losses in the first quarter. Cabinets are losing sales due to increased competition while the installation business remains challenged even after significant cost-cutting, analysts say.
As new home sales hit multiyear highs this week, it’s possible that Masco’s improving results may scuttle any plans, or make options other than a spin off more attractive. But Mr. Allman’s public statements reflect the continued trend away from conglomerates. And with Dan Loeb’s Third Point Partners owning a stake and lurking in the background, change may come faster than we might think.
Disclosure: The author owns shares in Masco