Newell Brands is moving forward with plans to sell about 10% of its product portfolio across a host of segments that includes home environment products and its consumer storage container business.
The decision to sell these and a handful of other product categories that are outside the housewares industry is the latest in a series of steps taken by Newell as its continues to integrate assets of Jarden. In December 2015, Newell purchased Jarden in deal that created a $16 billion consumer goods company.
“The combination of Newell Rubbermaid and Jarden has created a unique platform for transformative value creation and the actions we are taking to reshape the company will unlock this opportunity, bringing greater investment and growth to our highest potential categories such as writing, home fragrance, baby, food storage and preparation, appliances and cookware, and outdoor and recreation,” said Mark Tarchetti, Newell Brands president. “The choices we are making will strengthen the underlying growth and performance of our most strategic businesses and over time enable us to scale our core categories through external development.”
Newell officials said the sale of certain products in its portfolio includes heaters, humidifiers and fans within the consumer solutions segment. Those items are currently sold under several brands including Holmes and Sunbeam. The consumer storage container business within Newell’s home solutions segment is sold under the Rubbermaid brand.
Other product categories up for sale include a majority of its tools segment and winter sports within the outdoor solutions segment.
The total 2015 net sales of the businesses now for sale are approximately $1.5 billion, and include about $100 million of the $250 to $300 million of previously announced exits or assets held for sale, according to the company.
In addition, company officials said Newell would simplify its operating structure, consolidating its existing 32 business units to 16 operating divisions, including the creation of a new global enterprise-wide e-commerce division.
“Newell Brands’ new strategic plan establishes a clear set of investment priorities, a new organization design for the company, and a sharp set of portfolio choices that will focus our resources on the businesses with the greatest potential for growth and value creation,” said Michael Polk, CEO, Newell Brands.
The sale processes are underway and the company said it hopes to complete the divestiture of the assets held for sale within the first half of 2017. Proceeds from successful divestitures will be used primarily to accelerate the pay down of debt. More details will be shared on the company’s third quarter earnings call on October 28.