Business NEWS
Stanley Works to buy Black & Decker for $3.46 bln, big job cuts
By Steve Gavriliuc for CEOWORLD Magazine Updated:November 3, 2009
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Black & Decker Corp.(NYSE:BDK) is merging with The Stanley Works (NYSE:SWK) in a $4.5 billion all-stock deal, the merger will create Stanley Black & Decker, an $8.4 billion company.
Stanley share holders will own about 50.5 percent of the equity of the combined company, with Black & Decker shareholders owning about 49.5 percent.
Moody’s Investors Service said on Monday it may upgrade the ratings of Black & Decker Corp’s (BDK.N) bond and commercial paper and cut the ratings of Stanley Works (SWK.N), due to Stanley’s proposed acquisition of Black & Decker.
Black & Decker CEO Nolan D. Archibald said the companies had discussed a merger three times in the past, starting in the 1980s and then as recently as seven years ago. Those talks, he said, often broke down over who would be in charge.
Stanley Chief Executive Officer John Lundgren said that cost savings would come from business unit and regional consolidation, corporate overhead cuts, and changes to manufacturing, distribution and purchasing practices.
Fewer than 4,000 jobs, or less than 10 percent of total positions at the combined company, will be cut, Stanley Chairman and Chief Executive Officer John Lundgren.
Deutsche Bank and Goldman Sachs advised Stanley’s financial advisers on the deal, while Cravath Swaine & Moore served as legal counsel.
Black & Decker’s advisers were JPMorgan Chase, Hogan & Hartson and Miles & Stockbridge.
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