Stanley and Black & Decker to merge
The boards of Stanley Works (maker of the ubiquitous Stanley Knife which has expanded onto a full range of tools and building security products) and Black & Decker (power tools and work benches) have recommended a merger to their shareholders. Stanley shareholders will own 50.5% of the combined company and Black & Decker shareholders 49.5%. Synergistic opportunities are very clear. These two companies have the same mix of trade, manufacturing and DIY end-users and the same distribution channel partners (especially retail). They can merge accounting, IT, logistics and sales, and do some interesting new promotional bundles. Possible stumbling blocks? How similar are their corporate processes and cultures, their promotional style, the way they do things? However, both companies have previously acquired several complementary product operations without much grief, so I’m not expecting many issues at the operational level. If they focus on the merger rationale (ie. back office, front office and distribution channel synergies), then, off the cuff, this sounds like a very smart move.
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