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A. O. Smith Reaches Agreement to Sell Storage Tank Business

18 December 2000

A. O. Smith Reaches Agreement to Sell Storage Tank Business

    MILWAUKEE, Dec. 18 A. O. Smith Corporation (Amex: SMC) today announced a
definitive agreement to sell its Engineered Storage Products Company to CST
Industries, Inc. of Kansas City, Kan.  The companies expect to close the sale
early in January 2001.
    With the completion of this sale, A. O. Smith concludes the divestiture of
its Storage and Fluid Handling Technology platform.  On December 11, the
company announced the sale of its fiberglass pipe business to two subsidiaries
of Varco International of Houston, Texas.  The combined cash proceeds from
these sales total approximately $63 million.  The company will recognize a
$14 million after-tax charge to discontinued operations related to these
transactions, as well as adjustments related to a prior year's transaction.
    A. O. Smith Engineered Storage Products Company, with headquarters in
DeKalb, Ill., manufactures shop-welded, bolted, and SealWeld storage tanks for
municipal, industrial, and agricultural applications worldwide.  The company
has plants in Winchester, Tenn., and Parsons, Kan., in addition to its
facilities in DeKalb and employs approximately 450 people.
    "This transaction represents an important step in A. O. Smith's ongoing
strategy to concentrate on the electric motor and water heater businesses,"
O'Toole observed.  "The company is now well positioned to achieve its
financial objectives of generating above-average sales and profit growth."
    A. O. Smith Corporation is a diversified manufacturer with headquarters in
Milwaukee, Wis.  Its major product lines include fractional horsepower,
hermetic, and integral horsepower electric motors, residential and commercial
water heating equipment, and hydronic boilers.  The company has plants in
eight countries and employs approximately 15,000 people.