Stanley Black & Decker has entered into a definitive agreement to divest its Consolidated Aerospace Manufacturing division to Howmet Aerospace for a sum of $1.8 billion in cash. This strategic maneuver is designed to alleviate the company's debt burden and intensify its concentration on its primary product lines and operations. Following the announcement, shares of Stanley Black & Decker experienced a significant uplift, with Howmet Aerospace's stock also appreciating.
The divestiture, which is anticipated to conclude within the first six months of the upcoming year, will allow Stanley Black & Decker to reallocate capital and streamline its portfolio. Until the deal's completion, the Consolidated Aerospace Manufacturing unit will continue its regular operations under Stanley Black & Decker's ownership.
Chris Nelson, the Chief Executive Officer of Stanley Black & Decker, emphasized that the sale underscores the company's unwavering commitment to enhancing shareholder value and prioritizing the expansion of its leading brands and businesses. The divested unit specializes in manufacturing fasteners, fittings, and sophisticated components vital to the aerospace and defense sectors.
Howmet Aerospace projects that the acquired business will contribute between $485 million and $495 million in revenue for its fiscal year 2026, with an adjusted EBITDA margin exceeding 20% before accounting for any synergistic benefits.
In the wake of this development, Stanley Black & Decker's stock climbed by 3.5% during mid-afternoon trading, having surged by as much as 7% earlier in the day. Despite these recent gains, the company's shares have declined by approximately 6% since the beginning of the year. Concurrently, Howmet shares saw a 2% increase in the afternoon, bringing their year-to-date growth to over 90%.
This transaction marks a pivotal step for Stanley Black & Decker in optimizing its operational focus and financial structure, while also signaling a strategic expansion for Howmet Aerospace within the aerospace manufacturing domain.
