This week, consumer products giant Fortune Brands (NYSE:FO) announced that it was breaking itself up into three separate businesses. This news comes after activist investor Bill Ackman of Pershing Square disclosed his stake in the iconic company just a few months ago.

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A Better Fit
Thanks to Ackman, the notion that Fortune's three separate business division did not make strategic sense became crystal clear. In announcing its intent to split up, Fortune's management revealed that the company's board had voted unanimously for separation. Fortune Brands' three division - spirits, home and security, and golf - will either be sold off or spun out into individual businesses within the next several months.

Investors immediately agreed that in Fortune's case, three separate parts would be greater than the whole. After Ackman revealed his stake back in October, shares in Fortune Brands are up by nearly 20%. According to filings, Ackman's average cost was around $46 a share. Today, shares are trading for around $62. How much additional upside remains will be determined by how the breakup process ultimately unwinds.

Valuable Assets
Fortune's assets are very valuable and will likely attract plenty of attention from suitors. There is strong consensus already that Diageo (NYSE:DEO) of the U.K., the world's largest spirits company, is very interested in some of Fortune's spirits brands. The golf unit, home of strong golf brands Titleist and Foot Joy, could be of great interest to a wide host of buyers, from private equity shops to competitors like Nike (NYSE:NKE) or Germany's Adidas. It's doubtful that Callaway Golf (NYSE:ELY), with it market cap of just $530 million, could participate, as Fortune's golf division generates more than $1.2 billion in annual revenues.

Fortune's other division, home and security, includes Moen, the No.1 faucet brand in North America. In addition, the division also holds the leading brand positions in cabinets, doors, and padlocks, and generates more than $3 billion in annual revenues. Fortune plans to spin out this division into a separately traded public company.

Value in Many Forms
While Fortune's management claims to have spent the past "four years" contemplating the break of its divisions, it was Ackman who ultimately proved to be the catalyst. It just goes to show that value can be found in various ways and forms. (For related reading, take a look at Could Your Company Be A Target For Activist Investors?)

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