Newell Rubbermaid and Jarden. General Electric and Electrolux. As we approach the end of 2015, some big OEMs — and plastics companies — are going to make merger and acquisition-related headlines.
Today Fairfield, Conn.-based General Electric Co. kicked off what I expect to be a flurry of end-of-the-year deal news with the announcement that it was calling off the proposed sale of its appliances unit to Electrolux AB.
GE announced today it has terminated its agreement to sell its Appliances business to Electrolux and will now pursue other options to sell the Appliances business.
GE said it will continue to run the business while it pursues a sale, and that the unit is "performing well." GE's sales for the quarter that ended Sept. 30 were down 1 percent, and its earnings were down 29 percent, but sales in its Lighting and Appliances segment were up 8 percent, to $2.3 billion, and its profit was up 88 percent to $165 million.
The GE-Electrolux deal has been in the works for more than a year. As plastics processors know, GE has been investing in the business for a few years, shifting work to the United States from China and Mexico and making more plastic components in-house at its large Louisville, Ky., complex.
The proposed acquisition was announced in September 2014. However, the U.S.Department of Justice sued Electrolux and GE in July to stop the deal, citing concerns about the impact on competition in the appliance market.
Newell Rubbermaid & Jarden
Meanwhile, another big deal with plastics-related implications may just be getting off the ground. On Dec. 7, Dow Jones announced Newell Rubbermaid Inc. and Jarden Corp. are in merger talks. The story is attributed to unnamed "people familiar with the matter."
As I've mentioned in the Plastics Blog before, these types of stories from Dow Jones, Bloomberg and Reuters are typically true, because those news agencies have excellent sources in the financial community — although when they start including details like the cost of the acquisition, those are often off the mark. In this case, the story speculates that Newell Rubbermaid may value Jarden at $13 billion, or more.
Both companies have significant plastics processing operations. For details on Jarden's plastics holdings, check out my story from July on Jarden buying Waddington Group Inc.
Rubbermaid (and Rubbermaid Commercial Products) is one of the rare companies that's really a well recognized household name in plastics, although it makes many other consumer brands, including plastics-intensive Sharpie, Graco and Goody.