Merger agreement unites two iconic tool companies with no significant product overlap and could improve growth prospects
Hand tool maker Stanley Works and power tool maker Black & Decker have entered into a definitive merger agreement to create Stanley Black & Decker.
Company officials announced the agreement Nov. 2 and the deal is expected to close during the first half of next year. The all-stock transaction is valued at approximately $4.5 billion and will create an $8.4 billion global company. Black & Decker shareholders will receive 1.275 shares of Stanley common stock for each share of Black & Decker common stock owned as of Oct. 30.
The combination brings together two highly complementary companies with iconic brands and strong growth prospects, according to industry analysts. Founded in 1843, Stanley is known for its tools and security systems including brand names such as Stanley, FatMax, Bostitch, Facom, Proto, Mac Tools, Sonitrol, Stanley Security Solutions, Best, and Vidmar. Black & Decker brings a position in power tools and a diverse product offering under brands such as Black & Decker, DeWalt, Porter-Cable, Delta, Emhart Teknologies, Kwikset, Baldwin and Price Pfister.
"This is a unique opportunity to bring together two great companies, each with first-rate brands, and provide enhanced opportunities to generate superior returns as we build on this new, larger platform," said John F. Lundgren, chairman and CEO of Stanley, in a company news release. Lundgren will be president and CEO of the new combined company. "Stanley and Black & Decker together will have a comprehensive offering across all major tool categories and greater resources to support continued expansion of our combined security and industrial businesses."
"The complementary product and market fit of these two companies creates significant value for both companies' shareholders that neither company can accomplish on a stand-alone basis," says Nolan D. Archibald, chairman and CEO of Black & Decker, who will be executive chairman of the combined company for three years. "Joining forces with Stanley brings together two world-class companies with rich histories and strong track records in a one-of-a-kind opportunity to create outstanding benefits for our respective shareholders, customers and employees. We are excited by the opportunity to combine Black & Decker's unmatched lineup of power tools and security hardware with Stanley's leading franchise of hand tools and security products and services in a transaction that is both strategically compelling and financially attractive to the stakeholders of both companies."
The combined company will retain a presence in both Connecticut and Maryland, with its corporate headquarters in New Britain, Conn., and the Power Tools headquarters remaining in Towson, Md. Black & Decker has more than 22,000 employees and Stanley has approximately 18,200 workers.
For information, visit www.stanley blackanddecker.com.
This article originally appeared in the December 2009 issue.