AHP Divests And Focuses

- American Home Products is divesting its popcorn and canned ravioli business in order to pay down debt and focus on its higher-margin health care divisions. Analysts appear to agree that AHP did well in selling 80% of its food products unit to a private investment firm for $1.2 billion in cash, while retaining the remaining stake. AHP, which paid $9.6 billion for American Cyanamid in 1994, has gross debt of $7.4 billion and aims to cut the debt to $5 billion by the end of 1997, according to a Reuters report.

"A year down the road maybe they'll have to reassess things, and if the pipeline projects haven't worked out, then they have to think about another big acquisition or something like that," commented analyst Robert Uhl of Salomon Brothers.