US household goods giants agree USD 13.2bn merger

US household goods giant Newell Rubbermaid has agreed to acquire rival Jarden for $13.2bn to create a new company to named Newell Brands.

Newell Rubbermaid, whose products range from Parker and Sharpie pens to Graco buggies and Goody hairbrushes, will add a portfolio from Jarden that ranges from Yankee Candles to FirstAlert fire alarms, Tigex babycare products and Fournier playing cards to create a company with annual sales of around $16bn.

The offer values each Jarden share at $21 in cash and 0.862 Newell shares apiece, valuing them at roughly $60 a share.

Newell Rubbermaid president and chief executive Michael B. Polk, who will lead the expanded company, said: “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."

Polk predicted the combination would lead to annual efficiencies of around $500m over four years, with the deal projected to be immediately earnings-enhancing with "strong double-digit normalized earnings per share accretion post synergy realization".

Subject to approval by shareholders of both corporations and regulatory approval, the deal is expected to close in the second quarter of 2016.