The No. 2 and No. 3 battery companies in the U.S. — Energizer and Rayovac — want to combine forces against No. 1 Duracell.

The move could have an effect on as many as 700 jobs in the Madison area. But what kind of effect is not yet known.

Less than two weeks after Middleton-based Spectrum Brands Holdings said it intended to sell off its batteries and appliances unit, the company said Tuesday that Energizer Holdings, of suburban St. Louis, will buy the Rayovac and Varta batteries and flashlights business for $2 billion in cash, if government regulators approve.

“We are pleased to be selling to owners who can deliver the necessary resources and market expertise, and provide strong support for our people and the business’ future growth plans,” Spectrum Brands CEO Andreas Rouvé said.

Wall Street seemed happy to hear the news. Shares of both publicly traded companies rose Tuesday. Spectrum Brands ended the day at $125.23, up $4.75 a share, or 3.9 percent higher than Friday’s close. Energizer stock closed at $59.11, up $7.49 a share, or 14.5 percent, after jumping as high as $62.86 Tuesday morning.

“That’s validation that it’s just strategically optimal for both companies,” said Page Moreau, UW-Madison School of Business marketing professor and academic director of UW’s Center for Brand and Product Management.

At least one analyst quickly cheered the announcement. “If it can pass, we really like this deal,” wrote Bill Chappell of SunTrust Robinson Humphrey.

Chappell said if the two companies merge, they will have more than 40 percent of U.S. battery sales.

Jobs future unclear

It is too soon to tell what the deal will mean to jobs in Wisconsin. For now, operations will continue as usual, the companies said.

Energizer said the acquisition will “expand Energizer’s presence in a number of international markets, broaden Energizer’s product portfolio and manufacturing capabilities, and increase capacity for research and development.”

In a conference call with analysts, Energizer CEO Alan Hoskins said the products of the two companies are “highly complementary,” mentioning Rayovac’s advances in hearing-aid battery technology, in particular, and its “value-priced” line of batteries.

But Hoskins also said the combination will be “highly synergistic” and will result in “operational efficiencies” that could produce $80 million to $100 million in savings after the first three years.

In response to questions from analysts, Energizer officials declined to give details about where consolidations might occur.

Spectrum Brands has 18,000 employees worldwide. Of those, 1,200 employees are in Wisconsin: 670 at its Middleton headquarters, including 200 in the batteries unit. The hearing-aid battery plant in Portage has about 225 employees and at the Fennimore factory, nearly 300 people make AA and AAA alkaline batteries.

About 80 percent of employees of the Portage and Fennimore battery plants are represented by Teamsters Local 695, based in Madison, Spectrum Brands spokesman David Prichard said, and their contracts expire in 2022 and 2020, respectively.

Wayne Schultz, secretary/treasurer of Local 695, said his union represents 169 of the Portage workers and 268 in Fennimore.

“We’re always concerned about maintaining membership and helping the working class in the state,” said Schultz, who also is president of Joint Council 39, made up of four Teamsters Union locals in Wisconsin.

“We’re not going to look at it from a negative standpoint ... Hopefully, it’s a great opportunity for these two plants,” he said.

The batteries unit includes Varta batteries and has plants in Germany, Guatemala, Brazil and the United Kingdom. Varta batteries are sold primarily in Europe.

Spectrum Brands said on Jan. 3 it intends to sell the entire batteries and appliances division. The appliances include such brands as Remington shavers and hair appliances; George Foreman grills; and Farberware pots and pans.

Spectrum Brands’ other divisions — pet supplies; home and garden products; car care products; and locks and hardware — are based in Connecticut, Missouri and California. The consumer products company also has offices in Florida, Canada and overseas.

Prichard said, though, “We plan to keep our headquarters here.” The company moved into new, leased offices at 3001 Deming Way, Middleton, in 2013 and more office space was added last year.

Energizer — which includes HandStands auto air fresheners added in 2016 — has factories in Ohio, North Carolina, Vermont, Pennsylvania and in Asia and the Middle East. It has 4,400 employees, including 1,300 in the U.S., as of Sept. 30, 2017.

Legacy business

The Rayovac battery business started in Madison more than 100 years ago — as the French Battery Co., founded in 1906 — and was the legacy core of the global consumer products company that Spectrum Brands has become.

Madison Mayor Paul Soglin said his “only concern” is what the potential impact will be on employment in Wisconsin.

Portage has been a manufacturing site for Rayovac for 54 years and has a 110,000-square-foot plant there.

Steve Sobiek, the city’s director of business development and planning, said he’s optimistic the company will remain in Portage.

“Portage is the perfect location for the plant. We live in a global economy, and we expect (Rayovac to stay) for the same reasons that Saint Gobain – a multinational company – chose to invest $30 million here when they could have invested anywhere,” Sobiek said.

Portage Daily Register reporter Noah Vernau contributed to this report.

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Contact Judy Newman at jdnewman@madison.com with tips and story suggestions.

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Judy Newman is a business reporter for the Wisconsin State Journal.