Swedish lock giant to buy European Black & Decker unit

Security hardware maker to bring $108 million

March 19, 2003|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Black & Decker Corp. said yesterday that it has agreed to sell its European Security Hardware unit for $108 million to Assa Abloy AB of Sweden, the world's largest lock maker.

The Towson power-tool maker decided to sell the unit - which it gained as part of its acquisition of Emhart Corp. in 1989 - mainly because of a weak market in Europe, said Barbara B. Lucas, a company spokeswoman.

"The security hardware business in Europe is much more fragmented than in the United States, and ultimately we decided that we wanted to concentrate on our North American lock business," Lucas said.

The sale would enable Black & Decker to leave a noncore business in Europe, she said.

The sale is subject to regulatory approval from European antitrust regulators, the company said.

Lucas said Black & Decker still considers its North American lock business - which sells locks under the Kwikset brand - as strategic, mainly because the products are sold through the same distribution channels as its power tools.

Abloy earned $147.7 million on $2.95 billion in sales in 2002. In buying the Black & Decker unit, the Swedish company will gain three main divisions in Germany, the Netherlands and Italy, with subsidiaries and branches in France, Switzerland and the United Kingdom. The unit has 1,000 employees in Europe.

Lucas said employees at the Towson headquarters would not be affected by the sale.

Total sales at Black & Decker last year increased 3 percent, to $4.4 billion. Its European security hardware unit was among the company's few divisions where sales dropped.

The unit, which had about $102 million in sales last year, experienced a "high single-digit rate of decline in sales" compared with sales in 2001, according to Black & Decker's annual report filed last month.

That decline was offset by sales growth in security hardware products in North America, which grew "at a high single-digit rate over the 2001 level," the company filing said.

Lucas said Black & Decker has not earmarked the sale proceeds for any particular purpose but that they could be used for internal growth, reinvestment in product development, debt reduction or a share buyback.

Shares of Black & Decker rose 15 cents to close at $36.06.

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