GGG Graco Inc

Consumer-products maker Newell Rubbermaid Inc. on Monday said it would acquire rival Jarden Corp. for about $13.2 billion in cash and stock, merging brands such as Sharpie markers, Yankee Candle and Graco baby strollers.

For each Jarden share, Atlanta-based Newell Rubbermaid will pay $21 in cash and 0.862 of a share in Newell Rubbermaid. The price tag represents a 24% premium to where Jarden's stock was trading before The Wall Street Journal reported the companies were in deal talks.

Newell Rubbermaid holders will own about 55% of the combined company, to be named Newell Brands. Michael Polk, Newell Rubbermaid's chief executive, will lead the firm.

The tie up, expected to be completed in the second quarter of 2016, creates a $16 billion consumer goods company, the companies said.

Both companies' shares have surged in recent years on the strengthening economy and prior acquisitions that were well-received by investors. Their stock gains highlight investors' appetite for deals in a torrid period for mergers and acquisitions. The total dollar value of takeovers is at a record level this year.

Boca Raton, Fla.-based Jarden, launched in 2001, has grown to include more than 120 brands. They include Crock-Pot cookers, Marmot athletic gear, Aerobed inflatable mattresses and Sunbeam irons. Newell Rubbermaid, founded in 1903, has expanded through deals including pots-and-pans line Cephalon and Goody hair products. The company made its most significant purchase—Rubbermaid—in 1999 for about $6 billion.

"The scale of our combined businesses in key categories, channels and geographies creates a much broader canvas" for growth and margin expansion, Mr. Polk said.

Newell Rubbermaid said it expects roughly $500 million in annualized cost savings over four years and that the deal would immediately add to earnings.

Jarden shares rose 5.1% to $55.35 in premarket trading. Newell Rubbermaid's stock slid 2.3% to $44.23.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

December 14, 2015 08:05 ET (13:05 GMT)

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