US spirits group Brown-Forman Corporation has announced that it has completed the sale of "substantially all" of its Lenox Inc. household goods subsidiary to Department 56, Inc. of Eden Prairie, Minnesota for US$196m in cash.

The total consideration, which is subject to a post-closing working capital adjustment, is US$6m more than previously announced due to a working capital adjustment provision included in the sale agreement.

"While this transaction marks the end of 22 years of ownership by Brown-Forman, we believe these historically significant tabletop brands will be a good strategic fit with Department 56 and are likely to reach their full potential in its hands," said Brown-Forman's president and CEO Paul Varga.

Brown-Forman has retained ownership of the Lenox head office property in Lawrenceville, New Jersey and Lenox's UK subsidiary Brooks and Bentley, but it expects to sell both of these assets in due course.

In relation to the disposal, Brown-Forman recognised in the quarter to the end of July 2005, a non-cash impairment charge and transaction fees of US$0.54 per share, revised from the originally stated figure of  US$0.32 per share. The additional US$0.22 per share charge was due to the non-cash write-off of previously deferred losses related to underfunded pension plans included in the transaction, the company said.

Brown-Forman expects the estimated full-year effect of the Lenox disposal will be a US$0.54 to US$0.60 per share reduction in fiscal 2006 results from discontinued operations. Its full-year outlook for earnings from continuing operations remains unchanged at US$2.70 to US$2.80 per share, representing 12% to 17% growth from comparable results in the previous year.