What's going on?

The maker of the Sharpie pen is buying the company that owns Rawlings baseball gloves. Newell Rubbermaid is taking over Jarden in a deal worth around $15 billion.

What does this mean?

The companies are both �conglomerates,� which means that they own a bunch of disparate businesses. The combined company will, in theory, be able to leverage its bigger scale to better, and more efficiently, market its various products. For one, it will have more power when negotiating with the stores, like Walmart, that sell its brands.   Also, the combined company can find brand combinations that make sense. For example, Newell�s Parker pens can be sold as graduation presents by Jarden-owned Jostens (the store that makes yearbooks for graduating students). Finally, a deal like this thrives on the cost savings that it can immediately realize by eliminating overlaps between the two companies ($500 million of �cost synergies� are conservatively estimated in this case).

Why should I care?

The bigger picture: Value creation through acquisitions. In 2001, Martin Franklin took over a jar making company worth $120 million. He is now selling a $15 billion dollar company that owns 120 brands. The stock has returned investors almost 5,000% in that time. Interestingly, the growth has been done mainly through acquisitions � buying smaller (sometimes underperforming) brands and making them worth more together than they were apart. For the stocks: Newell investors seem unconvinced. While Jarden�s stock is up around 25% due to the deal price, Newell stock is slightly lower since news of the deal first leaked last week. Investors are, perhaps, unconvinced of Newell�s rationale for buying Jarden.