November 2, 2009 / 9:43 PM / 9 years ago

UPDATE 1-Stanley Works to buy Black & Decker for $3.46 bln

* 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)

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