Spectrum Brands to merge with largest shareholder

Amidst sale of battery and appliance businesses.

Spectrum Brands and its largest shareholder, HRG Group, have entered into a merger agreement. This deal coincides with the pending sale of Spectrum’s global battery business to Energizer Holdings and potential sale of its appliance business, which has received strong interest with an agreement expected to close by the end of FY18.

Spectrum Brands expects to receive circa $2 billion from the sale of its global battery business and circa $1.7 billion from the sale of its appliances business. The company has assured shareholders the merger agreement will not impact the sale of the battery and appliance businesses.

Spectrum Brands special committee chairman, Terry Polistina said, “We are pleased to have reached this mutually-beneficial agreement with HRG. Under this new ownership structure, Spectrum Brands will be an independent company with a widely distributed shareholder base and improved governance structure.

“We believe this transaction will deliver substantial value to all Spectrum Brands shareholders, including the company’s minority shareholders, and we look forward to the current Spectrum Brands’ management team advancing our growth and success.”

Spectrum Brands Australia head office in Mentone, Victoria 

Spectrum Brands executive chairman, David Maura added, “I want to thank the special committee for their work in negotiating this transaction with HRG, which will result in an independent company with meaningfully increased trading liquidity in our common stock.

“We are excited to emerge as a faster-growing, higher-margin company with a meaningfully stronger balance sheet and the flexibility to strategically redeploy a large amount of capital through share repurchases and highly accretive acquisitions, as opportunities present themselves.

“We remain poised to deliver stronger organic growth across our organisation and build upon our near 10-year track record of serving our investors with exceptional shareholder value creation. We have come a long way over the last decade, and the team couldn’t be more excited about the future of Spectrum Brands and our ability to serve our customers, employees and our stakeholders like never before.”

Following the transaction, the current Spectrum Brands management team will lead the combined company, and HRG’s board will be replaced by the Spectrum Brands board. Ehsan Zargar will resign from the Spectrum Brands board and will be replaced by an independent director to be selected by Leucadia National Corporation, HRG’s largest shareholder.

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