Analysis of the Newell Rubbermaid Acquisition 1998
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Analysis of the Newell Rubbermaid Acquisition 1998 I. The Deal The Problem: Newell's aggressive growth strategy and Rubbermaid's declining revenues. The problem facing Newell is the need to grow aggressively in a slow growth product market and the need to find synergistic acquisitions that could seamlessly be incorporated into their core businesses. Rubbermaid on the other hand, has operational efficiency problems, rising resin prices, poor service performance, and management problems that undermines their corporate culture for financial strength and innovative capabilities. The Solution: Newell's acquisition of Rubbermaid. Faced with an aggressive mandate to grow, Newell's management found Rubbermaid an attractive target that had cost and operational synergies that would increase their revenues and product lines. The Issues Three issues challenge the efficacy of the Newell Rubbermaid acquisition: 1) Will the zeal to drive revenue growth introduce costly and unmanageable levels of complexity that can drag down overall profitability? 2) Will an acquisition of this magnitude create disparate...


