Formica to sell flooring business to Berkshire Hathaway unit

By Jeff Pines

Washington, Jan. 26 - Formica Corp. said it is selling its flooring business to a unit of Berkshire Hathaway Inc.'s Shaw Industries Group.

The sale is contingent upon approval from the U.S. Bankruptcy Court for the Southern District of New York.

Formica said the equipment, which is in a leased manufacturing facility, will be sold to Shaw for cash and the assumption of certain liabilities.

Formica is not transferring its brand name, products or designs to Shaw.

Once Formica meets its laminated flooring obligations to its customers, it plans to exit the business in North America, the company said.

"Not being a vertically integrated producer in this highly competitive business, we reluctantly concluded that it would not be economically viable for Formica to remain as a niche, stand-alone manufacturer. Our flooring business represents a very small segment of our sales," said Frank Riddick III, Formica's president and chief executive officer, in a news release.

The court confirmed the Warren, N.J.-based flooring company's Chapter 11 plan of reorganization on Jan. 14. The company is expected to emerge from bankruptcy sometime during the first quarter.

When it does emerge from bankruptcy, a group led by Cerberus Capital Management LP and Oaktree Capital Management LLC will own 95% of the company.

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