Stanley to buy Black & Decker for $4.5 billion in stock
Stanley Works agreed to buy Black & Decker Corp. for $4.5 billion in stock, in a deal that will enable the companies — household names in the U.S. tools industry — to cut costs and exert more influence on pricing. (Wall Street Journal)
Both companies have felt the pressures of the recession, particularly given their close links with the housing industry. The companies expect the combination, which has been approved by both companies’ boards, will result in savings of $350 million a year and to add to earnings by the third year.
The transaction would represent “a landmark move in the tools industry” and one that makes strong sense as the housing market resumes some growth and raw materials prices rebound, said Brian Sozzi, retail analyst at Wall Street Strategies. Together the companies have greater purchasing power.j........................
Stanley Works Shares Rise After Purchase Of Black & Decker
The Hartford Courant
Wall Street cheered The Stanley Works' purchase of Black & Decker Corp. today, sending shares of Stanley up strongly after executives made their case for the creation of a merged tools giant with large cost savings.
Stanley shares closed at $49.61 on the New York Stock Exchange, up $4.46, or 9.9 percent from Monday's close on a flat day for the Dow indicating that investors believe the acquisition will boost Stanley's per-share performance. Shares of the companies making large acquisitions often slump immediately after an announcement.
Shares of Towson, Maryland-based Black & Decker closed at $62, up a whopping 31 percent.
The companies said late Monday they had agreed to combine, forming Stanley Black & Decker, with headquarters in New Britain and Stanley's top executives running the company. Black & Decker shareholders would receive 1.275 shares of Stanley stock for each of their old shares. At Monday's close, that would have been a 22 percent premium for Black & Decker shareholders.
In a conference call with analysts early in the day, Stanley CEO John Lundgren and Black & Decker CEO Nolan Archibald said the first order of business would be the integration of the businesses -- a task Lundgren called "a huge challenge," given their scale...........