Newell Rubbermaid has decided to take over Jarden in a cash-and-stock deal that it said would lead to the generation of nearly $16 billion in revenue every year with brands, including Sharpie, Elmer’s, Rubbermaid, Paper Mate, Lenox, Yankee Candle and Graco.
Jarden shareholders will get $21 in cash and 0.862 shares of Newell Rubbermaid stock for every share own by them. Implied total value is $60 per share, worth near about $13.2 billion.
The company said that the holders of convertible bonds are also going to embrace the contract that would push the price of the overall transaction to nearly $15.4 billion.
Newell Rubbermaid shareholders will be the owner of nearly 55% of the combined business. On Monday, it mentioned that it is expecting annual cost savings of nearly $500 million in the time span of over 4 years. The transaction could instantly add to earnings per share.
The chief executive of Atlanta-based Newell Rubbermaid, Michael Polk, is going to serve as chief executive of a company, which will be known as Newell Brands. The chief development officer at Newell Rubbermaid, Mark Tarchetti will be the president.
The target is to close the deal in the second quarter of 2016. It hasn’t received the approval from shareholders of the two companies so far. Negotiations over combining both the companies kicked off in the beginning of September, but geared up rapidly in November.
In an interview with TheStreet, the co-founder and executive chairman of Jarden, Martin E. Franklin explained, “We were not for sale and we didn’t solicit offers from anybody. We entered into conversations by way of an introductory meeting made by a banker at Centerview, and Michael and me met for first time at Barclay’s back to school conference in September”.