EXHIBIT 99.1
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[NEWELL LOGO] [RUBBERMAID LOGO]
CONTACTS FOR NEWELL CO.: CONTACTS FOR RUBBERMAID
INCORPORATED:
MEDIA AND INVESTORS: MEDIA:
Names: William T. Alldredge Name: Lorrie Paul Crum
Ross A. Porter, Jr. Phone: (330) 264-6464 Ext. 2970
Phone: (815) 969-6113 INVESTORS:
Name: William H. Pfund
Phone: (330) 264-6464 Ext. 2477
NEWELL AND RUBBERMAID IN $14 BILLION COMBINATION
CREATES CONSUMER PRODUCTS POWERHOUSE
FREEPORT, IL and WOOSTER, OH -- October 21, 1998 -- Newell Co. [NYSE,
CSE: NWL] and Rubbermaid Incorporated [NYSE: RBD] today announced that
they have approved a definitive agreement to merge through a tax-free
exchange of shares valued at approximately $5.8 billion. The combined
company, which will be called Newell Rubbermaid Inc., combines the
powerful brand franchises of Rubbermaid with the exceptional financial
performance and superior customer service of Newell. Newell Rubbermaid
would have pro forma 1998 sales in excess of $6 billion and a total
equity market capitalization of approximately $14 billion. The
transaction, which is expected to close in early 1999, will be accounted
for as a pooling of interests and is anticipated to be accretive to
earnings on a full year basis in 2000.
The merger agreement, which has been approved unanimously by the boards
of directors of both companies, calls for Rubbermaid shareholders to
receive 0.7883 shares of Newell common stock for each share of
Rubbermaid common stock they own. Based on the closing stock price of
Newell on October 20, 1998, this represents $38.68 per Rubbermaid share
or a premium of 49% over Rubbermaid's closing stock price of $25.88.
Newell will issue approximately 118 million shares of common stock to
Rubbermaid stockholders and will assume approximately $500 million in
net debt. Rubbermaid stockholders will own approximately 40% of the
combined company.
Newell Rubbermaid will have leading brand names in housewares, hardware
and home furnishings, office, infant/juvenile and commercial products.
Its roster of leading brands will include Rubbermaid(TM), Anchor
Hocking(TM), Calphalon(TM), Century(TM), Curver(TM), Goody(TM),
Graco(TM), Kirsch(TM), Levolor(TM), Little Tikes(TM), Mirro(TM),
Rolodex(TM) and Sanford(TM). These brands offer a full palette of
internal and acquisition growth opportunities on a global basis.
"Rubbermaid and Newell are a terrific strategic fit," said John J.
McDonough, vice chairman and chief executive officer of Newell. "The
Rubbermaid brands are universally recognized and synonymous with value
for customers. Their reputation for innovation and new product
development is legendary. In addition, they bring us further breadth of
distribution, increased shelf space and an enhanced presence in Europe.
This combination is totally consistent with our strategy and we are
fully confident in our ability to integrate Rubbermaid into our
operating and customer service systems. Newell Rubbermaid will be a
company with great global strengths, enhanced internal growth prospects
and broader acquisition opportunities."
"Newell is the ideal strategic partner for Rubbermaid," said Wolfgang R.
Schmitt, chairman and chief executive officer of Rubbermaid. "No one
manages the blocking and tackling of consumer products customer service
better than Newell. Their disciplines and systems are exactly what we
need if we're to optimize the value of our brands and innovations. This
transaction provides superior value for our shareholders and we look
forward to working with the Newell team to realize the major upside
potential stemming from the power of this combination. In the
competitive arena of global retailers, together we will be an invaluable
resource to our customers and create exciting new products for
consumers."
Once the transaction has been completed, Newell will begin the
systematic process of integrating Rubbermaid operations and practices
through the process, known colloquially, as "Newellization." This
process is intended to produce 98% on-time and line-fill performance and
a minimum 15% pretax profit margin. As a result, the company intends to
meaningfully improve Rubbermaid operating efficiency and margins. The
companies also expect that the merger will create revenue and operating
synergies through the leveraging of the Newell Rubbermaid brands;
innovative product development; improved service performance; stronger
combined presence in dealing with common customers; broader acquisition
opportunities; and increased ability to serve European markets. By
2000, these efforts and opportunities are expected to produce increases
over anticipated 1998 results of $300 million to $350 million in
operating income for the combined company.
William P. Sovey, chairman of the board of Newell, will become chairman
of Newell Rubbermaid. Mr. John J. McDonough, vice chairman and chief
executive officer of Newell, will become vice chairman and chief
executive officer of Newell Rubbermaid, and Mr. Wolfgang R. Schmitt,
chairman and chief executive officer of Rubbermaid, will become vice
chairman of Newell Rubbermaid. The Newell Rubbermaid board of directors
will consist of fifteen members, nine representing Newell and six
representing Rubbermaid, reflecting the respective ownership of the
company.
The transaction is subject to normal regulatory approvals and to the
approval of Rubbermaid and Newell shareholders. Newell expects to
continue its current $0.18 per share quarterly dividend on the shares of
the combined company.
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Robert W. Baird & Co. Incorporated acted as financial advisor and
provided a fairness opinion to Newell. Goldman, Sachs & Co. acted as
financial advisor and provided a fairness opinion to Rubbermaid.
Rubbermaid Incorporated, headquartered in Wooster, Ohio, is a multi-
national, leading-brand manufacturer and marketer of high-quality,
innovative products, including Rubbermaid consumer and commercial
products; Little Tikes(TM) traditional toys and commercial play systems,
and Graco(TM) and Century(TM) infant furnishings. The company employs
about 12,000 people around the world.
Based in Freeport, Illinois, Newell Co. is a multi-national manufacturer
and marketer of high-volume staple consumer products with 1997 sales
exceeding $3 billion and net income of almost $300 million. Their
products are sold through a variety of retail and wholesale distribution
channels. Product groups include hardware and home furnishings,
including Amerock(TM) cabinet hardware, Bulldog(TM) home hardware, EZ
Paintr(TM) paint applicators, BernzOmatic(TM) torches, Kirsch(TM),
Levolor(TM) and Newell(TM) window treatments, Intercraft(TM),
Decorel(TM) and Holson Burnes(TM) picture frames and LeeRowan home
storage; housewares, including Mirro(TM), WearEver(TM), Panex(TM) and
Calphalon(TM) cookware, Anchor Hocking(TM) glassware and Goody hair
accessories; and office products such as Sanford(TM), Berol(TM),
Eberhard Faber(TM) and rotring writing instruments and Eldon(TM) and
Rolodex(TM) office storage and organization products. The company has
approximately 32,000 employees.
# # #
The statements contained in this press release that are not historical
in nature are forward-looking statements. Forward-looking statements
are not guarantees since there are inherent difficulties in predicting
future results, and actual results could differ materially from those
expressed or implied in the forward-looking statements. These factors
include, without limitation, those disclosed in the Form 10-K filings
with the Securities and Exchange Commission for Rubbermaid and Newell.
Note to editors: today's news release, along with the other news about
Newell and Rubbermaid, is available on the Internet at
http://www.newellco.com and http://www.rubbermaid.com.
Abernathy MacGregor Frank Fax-on-Demand service at (800) 281-3244 is
available to send the following documents:
Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . #460
Newell Co. Fact Sheet . . . . . . . . . . . . . . . . . . . . . . . #461
Rubbermaid Incorporated Fact Sheet . . . . . . . . . . . . . . . . #462
Bios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . #463
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