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Newell Rubbermaid to buy Jarden corp. to form a consumer goods major

14th December 2015, Newell Rubbermaid Inc. is buying Jarden corp. in a deal worth more than US$15 billion. Newell Rubbermaid, Inc. is known for manufacturing food containers. The company will generate a huge revenue of US$16 billion per year with number of renowned brands under its roof such as Rubbermaid, Paper Mate, Graco, Yankee Candle, Sharpie, Elmer’s, Lenox and Calphalon.

The primary focus of the deal, primarily accelerate the growth of the company, is to prevent the occurrence of price-cuts. On the basis of outstanding shares of Jarden, US$220 million, the value of the deal turned out to be US$13.2 billion. The total offer on fully diluted basis sums up to US$15.4 billion. The new company will be called Newell Brands and will generate a combined revenue of US$16 billion.

Newell Rubbermaid’s CEO, Michael Polk, will serve as a CEO of Newell Brands and chief development officer of Newell, Mark Tarchetti will be appointed as the President. From Jarden, there will be 3 directors who are being appointed on Newell’s Board namely, Martin Franklin (Jarden Founder and executive chair), Ian Ashken (Jarden co-founder, president and vice-chair).

Jarden shareholders will receive US$60 per share (US$21 in cash and 0.862 Newell share for each share held). Newell Rubbermaid’s lead financial advisors include Goldman Sachs with Centerview Partners advising the board. Jarden’s financial advisory was led by Barclays and UBS Investment Bank.The deal will be closed in second quarter of 2016 as approval from shareholders of the both the sides are still awaited.

According to Techsci Research Newell brands will generate a huge revenue as it would get the ownership of more than 120 Jarden’s brands. This will also increase the company’s distribution network in the US, significantly. Revenue of Newell Brands from retail giants, like Wal Mart and Target, is expected to be much higher than revenue of Newell Rubbermaid in 2014. Newell Brands is expected to be a leader in innovation, state-of-the-art execution with more exposure to growing ecommerce market. With the huge portfolio of brands, Newell Brands would be able to tap unconsolidated, growing and large markets throughout the globe.

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