Newell Company: The Rubbermaid Opportunity

1237 Words5 Pages
Newell Company: The Rubbermaid Opportunity In October 1998, Newell Company was considering a merger with Rubbermaid Incorporated to form a new company, Newell Rubbermaid Incorporated. The agreement would be through a tax-free exchange of shares valued at $5.8 billion. Newell had revenues of $3.7 billion in 1998 across three major product groupings: Hardware and Home Furnishings, Office Products, and Housewares. Rubbermaid is a renowned manufacturer of a wide range of plastic products ranging from children's toys through housewares. Once the transaction is completed, Newell will begin he process of assimilating Rubbermaid's operations through a process called "Newellization." The companies expect that the merger will create synergy…show more content…
Reading the case analysis, Rubbermaid is extremely incompetent in these areas. Their operations are one of their biggest problems. According to the case, "although it excels in creativity, product quality, and merchandising, Rubbermaid is showing itself to be a laggard in more mundane areas such as modernizing machinery, eliminating unnecessary jobs, and making deliveries on time." Looking at Rubbermaid and analyzing their problems, they have totally the opposite qualities of companies that Newell has acquired in the past. Newell's acquired companies were mature businesses with unrealized profit potential. Rubbermaid has had a mature business for quite a long time and I do not see any room for unrealized profit potential. They have a very big international presence and Newell will end up hurting themselves once they have to deal with Rubbermaid and their incompetence. I do not feel that the newellization process fits Rubbermaid because these are two companies that have been around for a while, and it is not like Rubbermaid is a start-up or a fairly recent company that can be changed around quickly and all of the sudden have lean operations, which newellization has proved it can do with previous

More about Newell Company: The Rubbermaid Opportunity

Open Document