Newell Rubbermaid Will Acquire Jarden Corporation for $15.4 Billion

Newell Rubbermaid and Jarden Corporation today announced that they 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 a report published by The Wall Street Journal, the deal is worth $15.4 billion.

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 December 11, 2015, 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 December 11, 2015.

The transaction will be funded by cash on hand, debt and equity issued to Jarden shareholders; convertible bondholders will be entitled to convert in exchange for the merger consideration in conjunction with the transaction. Newell Rubbermaid has obtained a committed bridge facility, which it expects to replace with permanent financing prior to closing. Newell Brands intends to maintain its investment grade credit rating by using strong cash flow from the combined company to prioritize debt reduction in the short term towards a target leverage ratio of 3.0 to 3.5 times. Newell Brands expects to achieve the target ratio within two to three years, while simultaneously maintaining or increasing its dividend per share.

Newell Rubbermaid anticipates incremental annualized cost synergies of approximately $500 million over four years, driven by efficiencies of scale and new efficiencies in procurement, cost to serve and infrastructure that the combination unlocks. The company’s intent is to design a benchmarked, efficient set of structures that support long term business development. The transaction is projected to be immediately accretive with strong double-digit normalized earnings per share accretion post synergy realization.

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 Michael B. Polk as Chief Executive Officer.

The Newell Brands Board of Directors will be expanded to include three representatives of the Jarden Board, including Martin E. Franklin, Founder and Executive Chairman of Jarden and Ian G. H. Ashken, Co-Founder, Vice Chairman and President of Jarden. The new thirteen member Newell Brands Board will be chaired by current Newell Rubbermaid non-executive Chairman Michael Cowhig.

Mark Tarchetti, currently Chief Development Officer, 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 will also be responsible for the creation of a number of enterprise-wide capabilities, including Design, Innovation, Insights, eCommerce, and Direct-to-Consumer commerce.

Bill Burke, currently Chief Operating Officer, Newell Rubbermaid, will lead the legacy Jarden business upon completion of the transaction, working closely with Richard Sansone, Jarden’s Executive Vice President of Operations and the senior leadership teams across the Jarden businesses to deliver the current business plans while working with Mark Tarchetti to insure 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, Newell Rubbermaid and Richard Davies will become Chief Development Officer, Newell Rubbermaid, both effective January 1, 2016. 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.

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