Eclipse Aviation New Mexico

'Break Them Up' Strategy Behind Spinoff Surge

Corporate spinoffs are headed for the most active year on record as companies including Kraft Foods Inc. (KFT) and AMR Corp. look for avenues to unlock value from units.

Companies announced 145 spinoffs in the first half of 2011, the most of any half-year period since Bloomberg began tracking the data more than a decade ago. At least 17 more have been disclosed since June 30. The tally, which also includes decisions by Marathon Oil Corp. (MRO) and ITT Corp. (ITT) , exceeds the total from all of last year and is rising at an annual pace of 274, setting the stage to eclipse the record of 230 set in 2006.

“It’s a revision of the corporate business model where companies would grow to balance out their businesses,” said Peter Sorrentino , a senior portfolio manager at Huntington Asset Advisors in Cincinnati, which oversees $14.8 billion. “Today there’s a market-implied impediment to that. And if you can’t get paid for the businesses, you break them up.”

The 162 announcements through yesterday come as the market for mergers and acquisitions remains slow, removing one route for companies to shed unwanted divisions. Excluding spinoffs, companies are on pace to announce about $2.5 trillion of takeovers this year, down from a peak of $3.8 trillion in 2007, according to Bloomberg data. There were $2.2 trillion last year.

A global rout in equities that has driven the Standard & Poor’s 500 Index to its worst slump since 2009 also is creating some incentive to act now as well.

“Companies feel more pressure to review their portfolios in this environment,” Sorrentino said.

Kraft, the world’s second-biggest food company, said yesterday it plans to separate its $16 billion North American grocery unit to give the Northfield, Illinois-based company’s larger snack-foods business flexibility to acquire or divest brands and expand in emerging markets. Chief Executive Officer Irene Rosenfeld said the split is the “next logical step” in the company’s evolution.

Eclipse Aviation Celebrates Opening Of Gainesville Service Center ...

GNV Facility Boasts 45,000 Square Feet Of Hangar Space

Aero-News was on hand Friday as Eclipse Aviation held a ribbon cutting ceremony for the the official opening of its Southeast Eclipse Service Center (ESC) at Florida's Gainesville-Alachua County Regional Airport (GNV).

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