Energizer Holdings Inc—a St Louis, Missouri-based battery manufacturer—announced its plan to purchase Spectrum Brands’ battery and portable lighting business in a $2 billion cash deal, according to a Reuters article. The purchase is subject to regulatory approval.
The deal, which would include Rayovac—the leading manufacturer of hearing aid batteries for US private practices—and Varta, a Germany-based manufacturer of batteries, will potentially increase Energizer’s pricing power in its battery unit, according to Reuters, while expanding its overseas business in places like Latin America, Europe, the Middle East, and Africa (EMEA).
Shares for Energizer increased by 15% in early trading on Tuesday, when the deal was announced, and will give the company control over more than 40% of the US market and over 85% of the total market when the deal is complete, according to SunTrust analyst William Chappell, who was quoted in the Reuters article. Additionally, the deal is expected to create annual cost savings between $80 to $100 million for the newly combined company.
According to Reuters, the sale will allow Spectrum Brands to focus on its hardware, auto care, pet, and gardening products’ businesses.
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