* Deal represents 22 pct premium to Black & Decker holders
* Deal to add about $1/shr to earnings by third year
* New co to be called Stanley Black & Decker
Nov 2 (Reuters) - Tool makers Stanley Works (SWK.N) said it will buy rival Black & Decker Corp BDK.N in a $3.46 billion stock deal that is expected to result in $350 million in annual cost savings.
Under the deal, which has been approved by the boards of both companies, Black & Decker shareholders will receive 1.275 shares of Stanley shares for each Black & Decker share they own, representing a premium of 22 percent over Black & Decker's Monday close.
"This is a unique opportunity to bring together two great companies, each with first-rate brands, and provide enhanced opportunities to generate superior returns as we build on this new, larger platform," Stanley Chief Executive John Lundgren said in a statement.
The deal is expected to add about $1 per share to the earnings of the combined company, Stanley Black & Decker, by the third year after closing. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Anil D'Silva)