Newell Rubbermaid to Buy Jarden to Create Consumer Durables Giant
Newell Rubbermaid Inc, known for its food containers, agreed to buy Sunbeam and Coleman products maker Jarden Corp for more than $15 billion in a deal that will give it more leverage with retailers such as Wal-Mart Stores Inc.
The deal announced on Monday comes amid growing pressure for retailers to hold down prices as they compete with online players such as Amazon.com Inc.
Reuters reported in October that Wal-Mart, which provides nearly 13 percent of Newell Rubbermaid's revenue, was asking suppliers to cut prices.
Newell Brands will be led by Newell Rubbermaid Chief Executive Michael Polk. Martin Franklin, Jarden's founder and executive chairman, will be on the board.
Jarden shareholders will receive $21 in cash and 0.862 Newell shares for each share held, implying a $60 per share offer. The offer is at a 24 percent premium to Jarden's closing stock price on Dec. 4, the day before reports emerged that the company was in talks to combine with Newell.
Jarden's shares were up 1 percent at $53.30 in early afternoon trading, far below the offer price, while Newell's stock was down 10.5 percent at $40.51.
Analysts attributed the gap between the offer price and Jarden's shares to disappointment in the premium and the exclusion of Franklin from an executive role in the new company.
Newell Rubbermaid shareholders will own about 55 percent of Newell Brands.
The companies said they expected to realize cost savings of $500 million in the four years after the transaction closes.
Goldman Sachs was lead financial adviser to Newell Rubbermaid, while Centerview Partners advised the board.
Barclays was the lead financial adviser to Jarden, with UBS Investment Bank also advising.
Jones Day and Simpson Thacher & Bartlett provided legal counsel to Newell Rubbermaid, while Greenberg Traurig LLP and Kane Kessler PC were legal advisers to Jarden.