Jarden Corporation agreed to be acquired by Newell Rubbermaid. The combination creates a $16 billion consumer goods company with a rather massive portfolio of brands in large and growing global markets, including outdoor brand such as K2, Marmot, Coleman, Shakespeare, Marker and Volkl. According to reports, the purchase was valued at $13.2 billion.
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. Newell Rubbermaid shareholders will own approximately 55 percent of the company after the transaction is complete.
Upon the closing of the transaction, the newly formed Newell Brands will be led by Michael B. Polk as Chief Executive Officer.
The Newell Brands Board of Directors will be expanded to include three representatives of the Jarden Board, including Martin E. Franklin, founder and executive chairman of Jarden and Ian G. H. Ashken, co-founder, vice chairman and president of Jarden. The new thirteen member Newell Brands Board will be chaired by current Newell Rubbermaid non-executive Chairman Michael Cowhig.
Mark Tarchetti, currently chief development officer, Newell Rubbermaid, will become the president of Newell Brands upon completion of the transaction. Bill Burke, currently chief operating officer, Newell Rubbermaid, will lead the legacy Jarden business upon completion of the transaction.
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. Newell Rubbermaid anticipates incremental annualized cost synergies of approximately $500 million over four years, driven by efficiencies of scale and new efficiencies in procurement, cost to serve and infrastructure that the combination unlocks.
The acquisition is subject to approval by shareholders of both 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.
Martin Franklin (left), Jarden founder and CEO, and Newell Rubbermaid President and CEO Michael Polk are interviewed on the floor of the New York Stock Exchange after their announcement that the companies are merging.