Newell Rubbermaid and Jarden Corp. have entered into a definitive agreement to combine the two companies. The transaction creates a $16 billion consumer goods company to be named Newell Brands, with a portfolio of leading brands in large unconsolidated categories, including Paper Mate, Sharpie, EXPO, Parker, Elmer’s, Calphalon, Rubbermaid, Graco, Baby Jogger, Aprica, Goody, Irwin, Lenox, Rubbermaid Commercial Products, Coleman, First Alert, FoodSaver, Jostens, K2, NUK, Oster, Rawlings, Sunbeam and Yankee Candle. The scaled enterprise is expected to accelerate profitable growth with leading brands that compete in a global market that exceeds $100 billion, with “business and capability development supported by the efficiencies of this transformational combination,” according to the companies.
“The combination of these two great companies creates a $16 billion consumer goods company with incredible potential to grow and create value,” said Michael B. Polk, Newell Rubbermaid’s president and CEO. “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. I have long respected the value creation track record and entrepreneurial vision of Jarden’s founder, Martin E. Franklin, co-founder Ian G.H. Ashken and their team led by Chief Executive Officer James E. Lillie. I want to congratulate Jim on his strong leadership of Jarden over the last 12 years and his work positioning the business for the opportunity ahead, and I look forward to working with Martin and Ian as we drive the new Newell Brands towards its aspiration of becoming one of the preeminent consumer goods companies in the world.”
Franklin, executive chairman and founder of Jarden, said, “I am delighted that we are to play a part in bringing together these two winning companies. 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 extremely proud of Jarden’s success over the past 14 years, which has been driven by an extraordinary culture designed to perform at a high level. We have spent significant time with Newell Rubbermaid’s senior management team and are convinced they have a similar ambition and drive. I’m excited by the opportunities for this new combined organization and I look forward to being part of this dynamic new chapter.”
Lillie added, “This combination is focused on driving shareholder value and accelerating the growth and profitability of both businesses. Together, the business can move faster, globally leveraging the expertise and ability of the dedicated and talented employee base. The combined scale of both businesses will create opportunities for shareholders, customers and employees as the two businesses are very complementary in vision and in their ability to execute. I unequivocally support Mike and the combined teams in executing against the opportunity before us.”
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 Dec. 11, the implied total consideration would be $60 per share, which represents a 24 percent premium to Jarden’s 30-day volume weighted average share price as of Dec. 11.
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.
Upon the closing of the transaction, Newell Brands will be led by Polk as CEO.
The Newell Brands Board of Directors will be expanded to include three representatives of the Jarden Board, including Franklin, as well as Ashken, co-founder, vice chairman and president of Jarden. The new 13-member Newell Brands Board will be chaired by current Newell Rubbermaid Non-Executive Chairman Michael Cowhig.
Mark Tarchetti, currently chief development officer of Newell Rubbermaid, will become the president of Newell Brands upon completion of the transaction, with an initial focus leading the integration of the companies, including synergy delivery, portfolio strategy and long-term business development plans such as accelerated market deployment of the brands at home and internationally. He also will be responsible for the creation of a number of enterprise-wide capabilities, including design, innovation, insights, e-commerce and direct-to-consumer commerce.
Bill Burke, currently COO of Newell Rubbermaid, will lead the legacy Jarden business upon completion of the transaction, working closely with Richard Sansone, Jarden’s EVP of operations, and the senior leadership teams across the Jarden businesses to deliver the current business plans while working with Tarchetti to ensure the seamless transition of Jarden into Newell Brands.
“Given the magnitude of the opportunity ahead, I’m delighted that Bill and Mark will continue their partnership working with Rich and the great talent that Jarden brings to the combination. This is an important time, and the process of learning more about the brands, the people and the opportunities represented by the combined business is critical to realization of the full potential of the transformation,” said Polk.
As previously announced, Joe Arcuri will assume the role of chief commercial officer for Newell Rubbermaid and Richard Davies will become chief development officer for Newell Rubbermaid, both effective Jan. 1. These leaders will ensure the development and full delivery of the existing Newell Rubbermaid business plan.
Additional executive roles will be announced at the completion of the proposed transaction, according to the companies.