Newell / Rubbermaid Case Study - Strategy

NEWELL / RUBBERMAID

Analysis

BACKGROUND

In October 1998, Newell Company was considering a merger with Rubbermaid Incorporated to form a new company, Newell Rubbermaid Incorporated. The amalgamation would be through a untaxed exchange of sh atomic number 18s valued at $5.8 billion. Newell had three major crossroad groupings: Hardware and Home Furnishings, Office Products, and Housewares. Rubbermaid is a renowned manufacturing business of a wide range of waxy products ranging from childrens toys through housewares.

Acquisitions are the foundation of Newells growth strategy and the company has an aggressive and develop approach to achieving its growth rates. Newell focuses on acquisitions that are generally maturate businesses with unrealized profit potential, and pass a number of clearly define screening criteria.

If the transaction is completed, Newell will begin the process of assimilative Rubbermaids operations through a process called Newellization. The companies expect that the merger will create synergy through the leveraging of Newell Rubbermaid brands. By 2000, these efforts are

ANALYSIS

The Newellization process

The Newellization process is based on the prospective acquisition tar discombobulate having a number of attributes that correlate with Newells requirements of a target transcription. The origin step in this analysis is that of Newells screening criteria applied to the Rubbermaid opportunity.

The outgrowth criteria is that the target organization must be a fledged business.



Rubbermaid was started in 1920 when five businessmen who made toy balloons launched Wooster Rubber. The organization has been continuously run since 1920 and has had a great deal of advantage over the years. The company name has become synonymous with plastic dishware and storage units.

The next attribute desired of a company to undergo the Newellization process is the existence of Unrealized make headway Potential. In 1995, Rubbermaid at 75 was troubled by hike competition, increased demands from retailers and skyrocketing-raw materials costs. By taking advantage of...

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