Rival firm to buy Black & Decker

The two firms dominate their industry

Stanley Works is to buy its power tools and DIY equipment rival Black & Decker for $4.5bn (£2.7bn), the two US companies have announced.

Under the terms of the agreement, Stanley shareholders will own about 50.5% of the combined company, which will be called Stanley Black & Decker.

Stanley's chairman and chief executive John Lundgren said the all-share deal represented a "unique opportunity".

The plan to join the two industry giants still needs regulatory backing.

Shareholders must also first back the proposal.

Shares in Black & Decker rose 21% in after-hours trading in New York, while those in Stanley added 4%.

The two firms estimate that joining forces will cut their combined costs by $350m, possibly including job cuts.

Black & Decker has 22,100 workers to Stanley's 18,200.