Newell Rubbermaid Inc., parent company of food storage container maker Rubbermaid, announced Monday that it has agreed to buy rival Jarden Corp. in a cash-and-stock deal for $13.22 billion. The newly combined company, to be named Newell Brands, is expected to make $16 billion in yearly revenue with Newell Rubbermaid CEO Michael Polk becoming CEO of the new company, while Newell Rubbermaid CBDO Mark Tarchetti will become its president, reported the Associated Press.
In addition, Jarden founder and Executive Chairman Martin Franklin, Jarden President Ian Ashken and another unidentified person will join the Newell Brands Board, becoming three of its 13 members.
Newell Rubbermaid shareholders will own about 55 percent of the new company while Jarden shareholders will receive $21 in cash and 0.862 shares per share held, representing a 14 percent premium to Jarden's closing price Friday.
The deal gives Newell access to Jarden's diverse portfolio, which includes Sunbeam kitchen appliances and Coleman outdoor gear, part of the greatest advantage Polk noted that the deal provides, according to The New York Times.
"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," said Polk.
News of the deal was received with a mixed response, reported The Wall Street Journal. Jarden shares rose 4.1 percent in morning trading, while Newell dropped 5.9 percent.
The transaction is expected to close in the second quarter of 2016, however it needs the approval of shareholders from both companies.