One of Atlanta’s Fortune 500 giants is getting bigger, adding more brands to an already large portfolio that includes marks as diverse as Sharpie markers, Parker pens and Irwin tools.
Newell Rubbermaid Inc. has agreed to buy Jarden Corp. for the equivalent of $60 per share in a cash-and-stock deal worth more than $15 billion. The combined company would be called Newell Brands, have $16 billion in combined annual revenue and would be led by current Newell Rubbermaid CEO Michael Polk.
Executives expect $500 million in cost savings immediately as a result of the combination. Shareholders of Newell Rubbermaid will own 55 percent of the combined company.
Boca Raton, Fla.-based Jarden, which has built a broad portfolio including Mr. Coffee coffee makers, Sunbeam kitchen appliances, Coleman outdoor gear, Yankee Candle and many other brands, had higher revenues than Newell in the first nine months of the year ($6.1 billion to $4.4 billion) but was the smaller company by market capitalization before the announcement. That changed on the heels of the news, as Newell’s shares dropped 11 percent in Monday trading to $40.32 while Jarden’s rose nearly 1 percent to $53.
Mr. Polk said the complementary suite of products in consumer goods, baby products and other sectors made the partnership a great fit. Jarden founder Martin Franklin said if his company were the bigger of the two, it would have done the same deal in the buyer’s role.
“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,” Mr. Polk said in a release outlining his respect for Mr. Franklin and the company he built.
Both companies are aiming to grow their international presence. Newell, whose revenues come mostly from the U.S. and Europe, has made expanding its writing, commercial products and tools brands into China and Latin America a key part of its growth platform.
Like Newell, Jarden in last year’s annual report stated its goal of having half of revenues come from abroad, up from the 38 percent, or $3.2 billion, that came from international sales at the end of 2014.
Newell announced last year that it would move its Sandy Springs headquarters about a mile to a newly designed facility about half as large on Peachtree Dunwoody Road in early 2016. The deal is expected to close in the second quarter of next year.
Mr. Polk told the Atlanta Business Chronicle that he doesn’t expect the deal to affect the headcount in Atlanta significantly and that the company would manage Jarden with a “light touch.”
Mark Tarchetti, current chief development officer for Newell, will become Newell Brands president after the deal is completed.
Read more: Latin America Buoys Newell Rubbermaid’s Global Growth
Corrections: An earlier version of this article misstated the value of the deal.
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