American home essentials company Spectrum Brands Holdings Inc. (SPB) says it has agreed to sell its hardware and home improvement division to Sweden based Assa Abloy AB (STO: ASSA) in a deal worth $4.3 billion.
This deal will be an all cash one and it’s expected to be closed in the fourth quarter of the year. Moments after this announcement the shares of Assa Abloy increased by 6.2%.
Assa Abloy which is the largest lockmaker around the world says that this acquisition deal it’s vital for the company’s expansion beyond its commercial business in North America into the residential market.
“In summary, a great addition to Assa Abloy Group really the missing piece for us in the Americas and in North America, the U.S. in particular,” said Assa’s chief executive officer, Nico Delvaux.
In a statement, Assa Abloys said that it expects its earnings benefits to reach around $100 million by the year 2025.
On the other side, Spectrum says that it will be using proceeds from the deal to cut its debt pile and make strategic acquisitions. Shares of the company rose by 18% following announcement of the deal.
The company says this deal will also enable it to increase its focus on its pet care, home, garden and personal care businesses.