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Investing.com -- MasterBrand Inc (NYSE:MBC) stock jumped 7.9% and American Woodmark Corporation (NASDAQ:AMWD) shares surged 13.5% after the cabinet manufacturers announced plans to combine in an all-stock merger valued at approximately $2.4 billion in equity value.
Under the terms of the agreement, American Woodmark shareholders will receive 5.150 shares of MasterBrand common stock for each share they own. Following the transaction, MasterBrand shareholders will own approximately 63% of the combined company, with American Woodmark shareholders holding the remaining 37%.
The companies expect to achieve run-rate cost synergies of approximately $90 million by the end of the third year after closing. These savings will come from reduced overhead, procurement efficiencies, manufacturing network optimization, and operational improvements.
"Bringing together MasterBrand and American Woodmark will be a transformative step for both of our organizations that will even better position us to serve the evolving needs of our customers and provide consumers with more choice and access," said Dave Banyard, President and CEO of MasterBrand, who will lead the combined entity.
The merger will create what the companies describe as "the cabinet industry’s most comprehensive portfolio of trusted brands and products" across various price points. The combined company, which will retain the MasterBrand name, will have a pro forma trailing 12-month adjusted EBITDA of $639 million including anticipated synergies.
The transaction, unanimously approved by both boards, is expected to close in early 2026 subject to shareholder and regulatory approvals. The combined company will be headquartered in Beachwood, Ohio, while maintaining a significant presence in Winchester, Virginia.
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