Stanley Works Acquires Black & Decker for $4.5 billion
The deal took shape as an all-stock transaction where Stanley ponied up $4.5 billion for a majority share in B&D.
Stanley, of New Britain, Conn., and Black & Decker of Towson, Md., produce tools and construction materials. They are among the most widely recognized brands in their industry. Stanley makes the Bostitch line of nailers, and B&D is the parent company of DeWalt and Porter-Cable, brands familiar to woodworkers and builders alike.
“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,” John F. Lundgren, Stanley’s chairman and chief executive, said in a statement.
Nolan D. Archibald, Black & Decker’s chairman and chief executive, said the deal would result in $350 million in cost savings.
The deal, which was approved by the boards of directors of both companies, is expected to close in the first half of 2010. The next step is to put this before the shareholders and regulators.
In a prepared statement, Mr. Lundgren said, “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. 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 transaction is expected to create tremendous value for shareholders of both companies through the realization of significant cost synergies, operating margin expansion and enhanced growth opportunities. Joining these two companies together creates a powerful engine for growth, both as markets around the world recover and over the long-term.”
It’s been a tough year for companies in the construction and tool market. Consolidations and mergers can create strength, but they can also cause dificulties. The purchase of Delta and Porter-Cable by B&D from Pentair in 2004 resulted in hiccups with warehousing and distribution. For Connecticut, the home state of Stanley and The Taunton Press, it appears to be good news as a local company with a long history bolsters its size. Some local business leaders were optimistic about the news.
We have no word yet on whether the merger will result in any changes in the current lineup of tools or other products offered by these companies. But as tool news goes, this is one big mashup of global giants.