Newell Company

Newell-Rubbermaid Case

Topic: Corporate Strategy

Content: We will continue our discussion of corporate strategy by examining Newell’s proposal to acquire Rubbermaid. To understand if the acquisition is appropriate for Newell’s shareholders, we must determine if it passes the acid test – does Newell’s ownership of Rubbermaid create more value than other ownership scenarios?

Preparation questions: Please be prepared do discuss the following questions in class. You do not need to submit your answers to these questions.

• What makes a good acquisition target for Newell?

• What does success in “newellization” depend upon?

Assignment questions: Please answer the following questions in a single-spaced, two-page response.

1. Internal analysis of Newell Company (10 points)

a. Create a chart of the commonalities across Newell’s businesses. Be sure to focus on the markets, strategies, and operations of the business units (10 points).

2. Corporate Strategy (32 points)

a. Leading up to the proposed acquisition of Rubbermaid, Newell’s corporate strategy of growth by acquisition did/did not create a competitive advantage based on the following four reasons: (i) …, (ii) …, (iii) …, and (iv) …. (5 points each; 20 points total). (Note: please be sure to provide evidence or data from the case to support your conclusion.)

b. “Newellization” is a key part of the implementation of Newell’s corporate strategy. To successfully implement “Newellization,” Newell’s acquisition targets needed to demonstrate at least the following three characteristics: (i) …, (ii) …, and (iii) … (4 point each; 12 points total).

3. Financial Analysis of the Rubbermaid merger. Be sure to provide financial data and analysis supporting your conclusions of the proposed merger. (21 points)

a. The projected benefits of the merger are …(5 points) and I do/do not expect Newell to realize the benefits of the merger because … (8 points).

b. The proposed “price” of the merger is/is not...