Newell Rubbermaid Inc. agreed to buy Jarden Corp. for about $15.4 billion, creating a consumer-products giant with a sprawling portfolio of brands. Consumer products names which have become household names that will now be under one umbrella brand include Newell Rubbermaid’s Sharpie magic markers and its eponymous rubber food storage containers, and Jarden’s Coleman outdoor equipment and Yankee Candle lines.
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“The scale of our combined businesses in key categories, channels and geographies creates a much broader canvas” for growth and margin expansion, Mr. Polk said.
The combination of the two similarly situated companies ought to be able to achieve both economies of scale and increased purchasing power – they’re expecting to realize some $500 million in incremental cost synergies over the next four years – but they’re also both still digesting acquisitions. The richly valued deal gives Jarden shareholders $60 a share, a 24 percent premium to Jarden’s average share price over the past month. The deal is expected to close in the second quarter of 2016. Martin Franklin, co-founder and executive chairman of Jarden, and Ian Ashken, co-founder, vice chairman and president of Jarden, will join the Newell Brands’ board, which will be chaired by Michael Cowhig, Newell Rubbermaid’s non-executive chairman.
Newell Rubbermaid is going to purchase Jarden in a cash-and-stock deal.
Goldman Sachs was the lead financial adviser to Newell Rubbermaid, while Centerview Partners LLC advised the company’s board.
The deal, while primarily aimed at accelerating growth, will make it easier for Newell to fend off demands for price cuts, Neil Saunders, chief executive of research firm Conlumino, told Reuters.
Martin Franklin the founder of Jarden has built the business through a number of acquisitions, making it one of the most diversified makers of consumer products in the USA, which sells everything from condoms to firewood. With Newell’s share price down on today’s news (-10% at $40.78), Jarden’s shareholder consideration (if the deal closed today) now equates to $56.15 ($21 plus 0.862 Newell shares per Jarden share).
Trina Solar surged 17.3 percent to $11.20 after the company received a go-private proposal from a group that included its chief executive, valuing the company at more than $980 million.
The combined company will be known as Newell Brands, and Michael Polk will be at the helm.
ENERGY: The price of USA crude oil fell below $35 a barrel on Monday for the first time since early 2009 but then rebounded to gain about 2 percent, or 69 cents, to $36.31 a barrel. Jarden shareholders will own approximately 45% of the combined company.
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Barclays was the lead financial adviser to Jarden, while and UBS Investment Bank also advised the company.
