Newell Rubbermaid, the maker of Sharpie markers and Parker pens, agreed to buy diversified consumer products company Jarden Corp for $13.22 billion, adding brands such as Sunbeam kitchen appliances and Coleman outdoor gear.
Jarden shareholders will receive $21 in cash and 0.862 Newell shares for each share held, the companies said on Monday.
This implies an offer of $60 per share, a 14 percent premium to Jarden's closing price on Friday.
Jarden's shares rose nearly 5 percent to $55.25 in premarket trading on Monday, while Newell's shares fell 2.3 percent to $44.23.
The deal also gives Newell ownership of brands such as Yankee Candle, as well as yearbooks and class rings maker Jostens Inc, which Jarden bought for $1.5 billion in October.
Jarden founder Martin Franklin has built the company through acquisitions, making it one of the largest diversified consumer products makers in the United States, selling everything from firewood to condoms.
Newell Rubbermaid said it expects the deal to expand its presence in food and beverage, baby products and kitchen appliances among key retailers and geographies.
The combined company, Newell Brands, will be led by Newell Rubbermaid's Chief Executive Michael Polk. Martin Franklin will join the board.
Newell Rubbermaid was in talks to combine with Jarden, Reuters had reported earlier this month, citing one person familiar with the matter.
Newell Rubbermaid shareholders will own about 55 percent of Newell Brands after the transaction is complete, which is expected in the second quarter of 2016.
Newell Brands will realize cost savings of $500 million over the next four years, the companies said.
The deal value has been calculated based on 220.35 million Jarden shares outstanding as of Oct. 30.
Goldman Sachs was the lead financial adviser to Newell Rubbermaid, while Centerview Partners LLC advised the company's board.
Barclays was the lead financial adviser to Jarden, while and UBS Investment Bank also advised the company.
Jones Day and Simpson Thacher & Bartlett provided legal counsel to Newell Rubbermaid, while Greenberg Traurig LLP and Kane Kessler PC were legal advisers to Jarden.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila)