Stanley Black & Decker announced Wednesday a deal to buy Newell Brands Inc.'s tools business for $1.95 billion in cash. Stanley said it expects the acquisition, which is expected to close in first half of 2017, to add an adjusted 15 cents a share to earnings in the first year, increasing to about 50 cents a share by year three. The deal is expected to result in cost synergies of $80 million to $90 million by the third year. The brands included in Newell's tools business includes Irwin and Lenox. "Newell Tools is an important step in our quest to further strengthen our presence in the global tools industry," said Chief Executive James Loree. Stanley's stock, which was still inactive in premarket trade, has climbed 10% year to date, while Newell's shares have surged 14% and the S&P 500 has gained 4.5%.
Copyright © 2016 MarketWatch, Inc.
Continue Reading Below