Newell Rubbermaid is buying rival Jarden in a $13.2 billion cash-and-stock deal that creates a global consumer goods giant, the U.S. companies announced Monday.
Newell Rubbermaid, makes Rubbermaid storage containers, Sharpie pens and Calphalon cookware, while Jarden’s brands include Coleman tents, Yankee Candle candles, AeroBed inflatable mattresses, Crock-Pot cookers and Mr. Coffee coffeemakers.
Newell Rubbermaid said the combination of the two companies into the new Newell Brands would create a powerful portfolio of strong global brands with $16 billion in annual revenues.
“The scale of our combined businesses in key categories, channels and geographies creates a much broader canvas on which to leverage our advantaged set of brand development and commercial capabilities for accelerated growth and margin expansion,” Newell Rubbermaid president and CEO Michael Polk said.
Newell Rubbermaid estimated the merger will yield about $500 million in cost synergies over four years, followed by “strong double-digit” earnings per share growth.
Under the terms of the deal, Jarden shareholders will receive for each share they own $21 in cash and 0.862 shares of Newell Rubbermaid. Based on Newell Rubbermaid’s closing share price on Friday, the acquisition offer represents a 24% premium to Jarden’s share price average over 30 days as of Friday.
The companies expect the transaction will close in the second quarter of 2016, dependent on shareholder and regulatory approvals. Polk will be CEO of Newell Brands and the new company’s board of directors will have 13 members, including three representatives of the Jarden board.
Shares in Newell Rubbermaid tumbled 8.2% to $41.59 in opening trade Monday, while Jarden shares rose 2.2% to $53.81.
Copyright Agence France-Presse, 2015