What happened

Shares of Energizer Holdings Inc. (NYSE:ENR), a producer and distributor of household batteries, specialty batteries, and other lighting products, are jumping 14% as of 11 a.m. EDT. The rise in share price is a response to the Federal Trade Commission allowing expiration of the waiting period under the Hart-Scott-Rodina Antitrust Improvements Act of 1976, completing one step of the previously announced acquisition of Spectrum Brands' (NYSE:SPB) battery and lighting products business by Energizer.

So what

The agreement called for Energizer Holdings to acquire Spectrum Brands' Global Battery and Portable Lighting Business for $2 billion in cash -- bringing in name brands such as Varta and Rayovac, as well as a global distribution footprint. As previously mentioned, this is but one step to complete the previously announced acquisition. The transaction must proceed through the typical closing conditions including regulatory approvals in several jurisdictions outside the U.S., but both parties now expect the transaction to close in the second half of 2018.

A pile of different sized batteries.

Image source: Getty Images.

"We look forward to closing the acquisition of Spectrum Brands' battery and lighting products business and welcoming their global team into the Energizer family," said Alan Hoskins, chief executive officer of Energizer Holdings, Inc., in a press release. "The combination will expand our presence in a number of international markets, broaden our product portfolio and manufacturing capabilities, and increase our ability to bring innovative new products to consumers."

Now what

This is certainly a significant step forward and investors are clearly optimistic about the completion of this transaction, especially considering the move was a compelling strategic, operational, and financial fit for Energizer. Management's ability to generate meaningful cost synergies, and combine talent and manufacturing assets to improve innovation, should increase value returned to shareholders over the long term.

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