Newell Rubbermaid to buy Jarden

Newell Rubbermaid Inc., known for its food containers, agreed to buy Sunbeam and Coleman products maker Jarden Corp. for more than $15 billion in a deal that will give it more leverage with retailers such as Wal-Mart Stores Inc.

The deal, announced Monday, was made amid growing pressure for retailers to hold down prices as they compete with online players such as Amazon.

Reuters reported in October that Wal-Mart, which provides nearly 13 percent of Newell Rubbermaid's revenue, was asking suppliers to cut prices.

The deal, while primarily aimed at accelerating growth, will make it easier for Newell to fend off demands for price cuts, Neil Saunders, chief executive of research firm Conlumino, told Reuters.

Based on 220.35 million Jarden shares outstanding as of Oct. 30, the deal has a value of $13.22 billion.

However, Newell Rubbermaid said that on a fully diluted basis the offer was valued at $15.4 billion.

The combined company, to be called Newell Brands, will have annual sales of $16 billion.

Newell Brands' revenue from Wal-Mart is expected to be 2.6 times as big as Newell Rubbermaid's 2014 revenue from the retailer, Newell Rubbermaid said, while revenue from Target Corp. stores is expected to be 1.9 times as big.

From Amazon, revenue is expected be 1.8 times as big once the deal closes in the second quarter of 2016.

The deal — which gives Newell Rubbermaid ownership of more than 120 Jarden brands, including Yankee Candle, Crock-Pot cookware and class rings maker Jostens Inc — will significantly increase its U.S. distribution network.

Newell Brands will be led by Newell Rubbermaid Chief Executive Michael Polk. Martin Franklin, Jarden's founder and executive chairman, will be on the board.

Jarden shareholders will receive $21 in cash and 0.862 Newell shares for each share held, implying a $60 per share offer. The offer is at a 24 percent premium to Jarden's closing stock price on Dec. 4, the day before reports emerged that the company was in talks to combine with Newell.

Jarden's shares were up 1 percent at $53.30 in early afternoon trading, far below the offer price, while Newell's stock was down 10.5 percent at $40.51.

The companies said they expect cost savings of $500 million in the four years after the transaction closes.