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Newell / Rubbermaid Case Study - Strategy

 Newell as well as Rubbermaid Case Study - Approach Essay

NEWELL / RUBBERMAID

Analysis

BACKGROUND

In October 1998, Newell Company was considering a merger with Rubbermaid Included to form a fresh company, Newell Rubbermaid Designed. The amalgamation would be by using a tax-free exchange of stocks and shares valued by $5. eight billion. Newell had three major merchandise groupings: Equipment and Furniture, Office Products, and Housewares. Rubbermaid is a renowned maker of a a comprehensive portfolio of plastic goods ranging from kids toys through housewares.

Acquisitions are the foundation of Newell's development strategy plus the company has a aggressive and disciplined method to achieving its' growth focuses on. Newell concentrates on acquisitions which might be generally older businesses with 'unrealized earnings potential', and pass numerous clearly defined testing criteria.

In case the transaction is completed, Newell will start the process of assimilating Rubbermaid's functions through a method called " Newellization. " The companies expect that the merger will create synergy through the leveraging of Newell Rubbermaid brands. By 2000, these hard work is

ANALYSIS

The Newellization method

The Newellization process is based on the possible acquisition target having a number of attributes that correlate with Newell's requirements of a target organization. The critical first step to this evaluation is that of Newell's screening criteria applied to the Rubbermaid option.

The 1st criteria is usually that the target business must be a mature business. Rubbermaid was started in 1920 once five businessmen who made toy balloons launched Wooster Rubber. The business has been continuously run seeing that 1920 and has had quite a lot of success over the years. The company title is becoming synonymous with plastic dishware and self storage units.

The next feature desired of a company to undergo the Newellization process may be the existence of Unrealized Earnings Potential. In 1995, Rubbermaid at 75 was bothered by increasing competition,...

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