Sources inform “Globes” that after a year of negotiations, ZAG Industries and Keter Plastics are slated to sign an agreement for the sale of Keter’s toolbox activity to ZAG for $30 million. The agreement will constitute the basis for strategic cooperation between the two companies. US company Stanley Works (NYSE: SWK) owns ZAG.
ZAG is considered the global leader in toolbox manufacturing for the do-it-yourself retail chains, with a 50% share of the world market. For ZAG, acquiring Keter’s activity involves further focusing on this activity, and removes a competitor from the market.
Keter Plastics owned by CEO Sami Sagol, will be leaving a profitable field, as indicated by the price of the deal, but not part of its core business. Keter is trying to divest itself of a field in which it is not the world leader. Keter is expected to continue producing toolboxes for ZAG at its Carmiel plant, under a subcontracting agreement.
At the same time, the two companies are negotiating a deal to make Keter the authorized marketer in Israel for ZAG’s products. ZAG’s sales in Israel account for only a small fraction of its business. All these agreements require the approval of the Antitrust Authority director general.
Published by Globes [online] -l www.globes.co.il - on July 17, 2003