ASSA ABLOY AB (publ) (OM:ASSA B) entered into a definitive agreement to acquire Hardware and Home Improvement Business of Spectrum Brands Holdings, Inc. (NYSE:SPB) for $4.3 billion on September 8, 2021. Spectrum Brands will pay for an aggregate purchase price of $4.3 billion in cash (the " Purchase Price "), on a cash and debt free basis, subject to customary purchase price adjustments. The transaction will be fully funded by existing cash and new debt. HHI will become part of the Opening Solutions Americas Division. ASSA ABLOY has agreed to pay a termination fee of $350 million in certain circumstances if the transaction agreement would be terminated and required regulatory approvals would not have been obtained. For the last twelve month ended July 4, 2021, HHI's net sales were $1.7 billion, Net Income was $305.5 million and EBITDA was $339.8 million. HHI is headquartered in Lake Forest, California with some 7,500 employees worldwide and has manufacturing facilities in the United States, Mexico, Taiwan, China, and the Philippines.

The transaction is subject to receipt of certain regulatory approvals, the expiration or termination of required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and customary closing conditions. The consummation of the acquisition is not subject to any financing condition. Upon closing of the transaction, Spectrum Brands expects to receive approximately $3.5 billion in net proceeds, subject to final tax calculations and purchase price adjustments. Spectrum Brands expects to use the proceeds from this transaction to repay debt and reduce its gross leverage ratio to approximately 2.5x times in the near term. Excess proceeds are expected to be allocated to invest for organic growth, fund complementary acquisitions and return capital to shareholders. The transaction is expected to close during the fourth quarter of 2021. As on December 2, 2021, the transaction is expected to close during 2022. The operating margin effect for ASSA ABLOY is initially expected to be dilutive. The acquisition will be accretive to EPS from the start. On December 2, 2021, it was communicated that the acquisition of HHI is expected to close during 2022. The US regulator continues to review the proposed acquisition of HHI and ASSA ABLOY is working to resolve its potential concerns. so ASSA ABLOY and Spectrum Brands have agreed to extend their agreement for ASSA ABLOY to acquire the HHI division of Spectrum Brands to June 30, 2023.

Credit Suisse Securities and RBC Capital Markets acted as joint financial advisors to Spectrum Brands. Davis Polk & Wardwell LLP acted as legal counsel for Spectrum Brands. BofA Securities acted as exclusive financial advisor and Linklaters LLP and Hogan Lovells acted as legal advisors to ASSA ABLOY. The Linklaters team was led by Peter Cohen-Millstein, Megan Ridley-Kaye and Fredrik Lindqvist. Darcy Down, Alan Zoccolillo, Nina Nola and Federico Cuadra del Carmen of Baker & McKenzie LLP acted as legal advisor to Spectrum brands.