Coverage: Newell Rubbermaid might merge with Jarden

Newell Rubbermaid is known for its storage containers and Sharpie markers, but the company is looking to diversify itself even further by entering merger talks with consumer products company Jarden Corp.

Jarden owns several brands, such as outdoor supply company Marmot and cleaning supply brand Quickie.

Greg Roumeliotis of Reuters had the day’s news:

Newell Rubbermaid Inc, known for its Sharpie markers and Parker pens, is in talks to combine with consumer products company Jarden Corp, according to a person familiar with the matter who requested anonymity because the negotiations are confidential.

Newell’s shares closed up 7.4 percent at $48.16 on Monday and Jarden closed up 3.7 percent at $50.09. Both stocks extended their gains slightly in trading after the bell.

The terms under discussion could not be learned, and it is possible the talks will not lead to a deal, said the Wall Street Journal, which first reported the news.

Newell had a market value of $11.97 billion as of Friday’s close, slightly more than Jarden’s market capitalization of $10.65 billion.

A Jarden spokeswoman declined to comment. Newell was not immediately available for comment.

Amanda Gomez of TheStreet explained how both companies’ stock price surged after news broke of the potential merger:

Newell Rubbermaid stock is gaining by 0.96% to $48.62 in after-hours trading on Monday, following speculation that the company is in talks to merge with Jarden Corp., sources told the Wall Street Journal.

Jarden stock is rising by 1.12% to $50.65 in after-hours trading today.

A transaction would combine Newell Rubbermaid brands, such as Paper Mate, Sharpie and Graco, with Jarden’s brands, including Mr. Coffee, Coleman and Yankee Candle.

Annual sales of a combined company could reach $14 billion, the Journal added.

Newell Rubbermaid is the larger company with a $12 billion market capitalization, while Jarden’s market capitalization is about $10.5 billion.

If Jarden is acquired by Newel Rubbermaid, the consumer products company could fetch for about $13 billion or more, the Journal estimates.

Newell Rubbermaid stock soared towards the end of the trading day on Monday, with shares up 7.43% to $48.16 on heavy trading volume.

By the end of the trading day, 7.08 million shares had exchanged hands, compared with its average daily volume of 1.98 million shares.

Liz Hoffman, Dana Mattioli and Dana Cimilluca of The Wall Street Journal described how the two companies got to where they are today:

A sale of Jarden would be a capstone to a successful run for Martin Franklin, who has built the Boca Raton, Fla., company to more than 120 brands. They include Ball jars, Crock-Pot cookers, Aerobed inflatable mattresses, Rawlings baseball mitts and Sunbeam irons.

Jarden was launched in 2001 by Mr. Franklin, who served as chief executive until 2011 and is now its executive chairman. He assembled its disparate brands as many other companies were narrowing their focus.

The company bought class-ring and yearbook company Jostens in November for $1.5 billion and in July acquired Waddington Group Inc., a maker of disposable tableware, for $1.4 billion.

Mr. Franklin has launched two other acquisition vehicles, chemical company Platform Specialty Products Corp. and Nomad Foods Ltd. In June, Nomad bought Iglo Foods Holdings Ltd., a U.K. frozen-food company whose brands include Iglo and Birds Eye, for €2.6 billion ($2.8 billion).

Platform’s stock has been under pressure lately, and was down by more than half this year as of Monday after the company lowered its financial forecast amid currency pressure and weakness in its agriculture business.

Newell Rubbermaid, best known for its Rubbermaid food-storage bins, got its start in 1903 in Ogdensburg, N.Y., after a curtain-rod maker defaulted on its loans, according to the company’s website. Edgar A. Newell, a local businessman, purchased the company and renamed it.

The company owns Paper Mate pens, Lenox power tools and Goody hairstyling products. It also makes wheelbarrows and wet-mops, and sells storage carts and trays to hospitals through a separate health-care division.

Newell Rubbermaid also has an acquisitive history. Beginning in 1965, it pursued an acquisition strategy to boost sales, and made more than 70 purchases in 30 years, according to its website. Newell Rubbermaid acquired such companies as Calphalon Corp., the maker of pots and pans, and Goody Products Inc. In 1999, it made its then most significant acquisition, buying Rubbermaid in a nearly $6 billion deal.