Newell Rubbermaid And Jarden Agree To Merge

Newell Rubbermaid Inc. and Jarden Corp. said Monday they have agreed to merge in a deal expected to create a $16 billion consumer goods company that will be named Newell Brands. Under the terms of the deal, Jarden shareholders will receive $21 in cash and 0.862 Newell shares per share. The price is $60 a share, based on Newell's closing price on Friday, equal to a 24% premium over Jarden's 30-day weighted average share price. The deal will be financed with cash on hand, debt and equity issued to Jarden shareholders, while convertible bondholders will be entitled to convert their debt to shares in the new entity. Newell expects to keep its investment-grade credit rating, by prioritizing debt reduction in the near term. Newell said it expects annualized synergies of about $500 million over four years. The deal is expected to close in the second quarter of 2016. Jarden shares surged 6% in premarket trade, while Newell shares were not yet active.