Newell Rubbermaid and Jarden Corporation have entered into a definitive agreement to combine the two companies in a deal that will create a $16 billion consumer goods company under the Newell Brands name.
The two companies’ lengthy roster of home products brands includes a number of high profile names in the housewares business including Rubbermaid, Calphalon, Crock-Pot and Mr. Coffee, among others.
Upon completion of the deal, Michael B. Polk, currently CEO of Newell Rubbermaid, will become chief executive officer of Newell Brands. Mark Tarchetti, currently chief development officer of Newell Rubbermaid, will become president of Newell Brands.
In addition, three Jarden Corporation directors will join the Newell Brands board of directors including Martin E. Franklin, founder and executive chairman of Jarden; and Ian G.H. Ashken, co-founder, vice chairman and president of Jarden.
“The combination of these two companies creates a $16 billion consumer goods company with incredible potential to grow and create value,” said Polk. “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.”
Franklin added, “The combination offers significant value for our shareholders and the opportunity to participate in the combined company’s long-term value creation potential as shareholders in Newell Brands. I’m excited by the opportunities for this new combined organization and I look forward to being part of this dynamic new chapter.”
Under the terms of the agreement, Jarden shareholders will receive, for each Jarden share, $21 in cash and 0.862 shares of Newell Rubbermaid stock at closing. Based on Newell Rubbermaid’s closing share price as of December 11, 2015, the implied total consideration would be $60 per share, which represents a 24% premium to Jarden’s 30-day volume weighted average share price as of December 11, 2015.
The transaction will be funded by cash on hand, debt and equity issued to Jarden shareholders; convertible bondholders will be entitled to convert in exchange for the merger consideration in conjunction with the transaction.
The acquisition is subject to approval by shareholders of Newell Rubbermaid and Jarden Corporation, receipt of regulatory approvals and other customary closing conditions. The transaction is expected to close in the second quarter of 2016, company officials said.