Two giants in housewares and consumer products plan to combine forces in a deal that represents 16 percent of the $100 billion per year global market in which they compete.
Newell Rubbermaid Inc. and Jarden Corp. announced Dec. 14 that they will combine their businesses to create a powerhouse known to consumers through dozens of iconic brand names such as Graco, Sharpie, Mr. Coffee, Sunbeam, and of course Rubbermaid, arguably the best known of the brands.
Both companies are big plastics processors producing goods such as food containers, office supplies, baby products and cutlery. They also consume large numbers of plastics components for diverse household goods such as writing instruments and small appliances.
The soon-to-wed companies predict cost savings in the merger to reach $500 million over the next four years. Synergies should allow the combination to post earnings before interest, taxes, depreciation and amortization of $3 billion on annual sales of $16 billion.
The parties see the combination as complementary. There is with little overlap of product lines and the companies sell through many common retail chains. They predict increased exposure to fast-growing e-commerce channels and a higher profile in international markets. They will accelerate business plans and growth in key markets of food and beverage, baby products, commercial products, kitchenware and appliances.
“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,” noted Newell Rubbermaid President and CEO Michael Polk in a news release.
“The combined scale of both businesses will create opportunities for shareholders, customers and employees as the two businesses are very complementary in vision and in their ability to execute,” said Jarden CEO James Lillie.
