Newell Rubbermaid to buy Jarden to create consumer durables giant

Mon Dec 14, 2015 1:39pm EST
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By Yashaswini Swamynathan

(Reuters) - Newell Rubbermaid Inc (NWL.N: Quote), known for its food containers, agreed to buy Sunbeam and Coleman products maker Jarden Corp JAH.N for more than $15 billion in a deal that will give it more leverage with retailers such as Wal-Mart Stores Inc (WMT.N: Quote).

The deal announced on Monday comes amid growing pressure for retailers to hold down prices as they compete with online players such as Inc (AMZN.O: Quote).

Reuters reported in October that Wal-Mart, which provides nearly 13 percent of Newell Rubbermaid's revenue, was asking suppliers to cut prices.

The deal, while primarily aimed at accelerating growth, will make it easier for Newell to fend off demands for price cuts, Neil Saunders, chief executive of research firm Conlumino, told Reuters.

Based on 220.35 million Jarden shares outstanding as of Oct. 30, the deal has a value of $13.22 billion.

However, Newell Rubbermaid said that on a fully diluted basis the offer was valued at $15.4 billion.

The combined company, to be called Newell Brands, will have annual sales of $16 billion.

Newell Brands' revenue from Wal-Mart is expected to be more than 2.6 times Newell Rubbermaid's 2014 revenue from the retailer, the Newell Rubbermaid said in an investor presentation, while revenue from Target Corp (TGT.N: Quote) stores is expected to be 1.9 times bigger.   Continued...

File photo of Martin Franklin, Executive Chairman of Jarden Corp, speaking at the Reuters Consumer and Retail Summit in New York June 27, 2011. REUTERS/Brendan McDermid (UNITED STATES - Tags: BUSINESS) - RTR2O61E