Newell Brands completed its merger with Jarden Corp on 4/15/2016 for cash and Jarden Corp stock.
The SEC filing for this merger can be found through the Newell Brands web site at:
For Newell Rubbermaid shareholders this is a name change only. For Jarden Corporation shareholders this merger is a cash-plus-stock reorganization. All the information below is from the information available from the S-4/A filed with the SEC.
If you have made any entries for this transaction before reading these steps, we suggest to delete them before continuing.
This FAQ is separated into two sections, depending on if you are using the online accounting at myICLUB.com, or the desktop Club Accounting 3. The steps for myICLUB are presented first, followed by steps for the Desktop Club Accounting.
Use the Merger with cash transaction.
Date – 4/15/16
Merging Company – JAH (Jarden Corp)
To record this merger will require multiple entries in the Club Accounting 3 software. The basic outline of these entries is given below:
The capital gain realized is limited to the actual cash received so some clubs may need to adjust the capital gain amounts before entering the capital gain distributions. Instructions for doing this are included. The total merger consideration is $59.1435 per Jarden Corp share. Your capital gain will be based on this total consideration with a limit that the total capital gain cannot exceed the total cash received, excluding cash-in-lieu of fractional shares.
Due to the calculations required to enter this merger in the desktop Club Accounting, we have put together a spreadsheet, which can be used to keep track of the figures needed for the merger.
Before continuing, we suggest to download a copy of the spreadsheet by clicking here.
1. Calculate the capital gain.
The total merger consideration is $59.1435 per Jarden Corp share. This is $21.00 in cash and $38.1435 in Newell Brands shares. Calculate the total value received for your Jarden Corp shares by multiplying 59.1435 by the total shares of Jarden Corp owned. This must be done on a block by block basis.
Total Proceeds = [59.1435 x (# of Jarden Corp shares owned in each block)]. (Do this calculation for each block of shares.)
Write down the total proceeds amount on paper or spreadsheet for each block of Jarden Corp shares owned. From the total proceeds subtract the cost basis of that particular block. This will give you the gain for each block of Jarden Corp shares using the total proceeds. Ignore any blocks with a loss.
The cost basis can be found by starting a partial sale of Jarden Corp. A block selection screen will appear with the date purchased, number of shares and current cost basis for each block. Copy this information into the spreadsheet (if you have downloaded it), then cancel the sale.
If you are using the spreadsheet, you can skip the next two paragraphs, and go directly to the Accounting for Cash Received section.
Calculating the cash received for each block, for those blocks with a capital gain:
The equation for this is [.34 x (# of Jarden Corp shares owned in each block)]. For each block compare the cash received for that block with the capital gain calculated previously for that block. The smaller of the numbers is your gain from that block. Remember to ignore any blocks with a calculated loss using the total proceeds equation. Once you have the adjusted capital gain for each block with a gain, which is the smaller of a) the cash received or b) the total proceeds gain, add all the gains from each block with a gain. This will be your total capital gain for this merger. Remember to differentiate between short term and long-term gains. (Check the purchase date of each block and compare it to the merger completion date of 4/15/2016.)
You should now have a figure for long-term and short-term capital gains recognized from this merger. If this amount is less than the total cash received, not including cash-in-lieu for fractional shares, then subtract the sum of your capital gains from the total cash received. This will be [21.00 x (total # of Jarden Corp shares owned)] – (sum of capital gains). This amount will be entered as a return of capital.
2. Accounting for Cash Received
All of the following entries use the cash dividend screen, in CA3 this is Transactions > Cash Dividend or Distribution.
Date these transactions 4/15/2016
The security should be Jarden Corp
Change the “type” field to Long-term capital gain.
Amount should be your LTCG as calculated above, or from the spreadsheet.
Next repeat the process for your short-term capital gain.
Change the “type” field to Short-term capital gain.
Amount should be your STCG as calculated above, or from the spreadsheet.
Finally, enter a return of capital entry, if needed.
Change the “type” field to Return of capital.
Amount should be: (Total Cash received) – (LTCG + STCG)
If your LTCG + STCG = Total Cash Received, no return of capital entry is needed.
Continue to step 3, The Merger.
3. The Merger
Go to Transactions > Merger. If you are unfamiliar with merger transactions you can get help at this URL: https://www.iclub.com/support/kb/default.asp?page=normal_merger
Here is the information you need to complete the merger.
Old Security or Merging Company: Jarden Corp (JAH)
Price per share of old Security / Jarden Corp: Use the last valuation price
Cash received: See your broker statement for cash-in-lieu
New Security: Newell Brands (NWL)
Shares received: .862 x (# of JAH shares owned)
(Remember to include fractional shares.)
Save the transaction and this is finally done.
A worksheet is provided below to record the items that need to be calculated.
A. Total Proceeds received.
59.1435 x (# of Jarden Corp shares in block) = ____________________________
B. Total cash received.
[21.00 x (# of Jarden Corp shares in block)] = ________________
C. Cost Basis of this block of Jarden Corp shares _______________ (from accounting records)
D. Total Proceeds LTCG = _____________________ (A-B) fill-in D or E as appropriate
E. Total Proceeds STCG = ____________________(A-B) fill-in D or E as appropriate
F. Actual LTCG ___________________ (the lessor of B or D.)
G. Actual STCG ____________________(the lessor of B or E.)
H. LTCG + STCG = __________________.
I. Return of Capital amount = (Total Cash Received) – (LTCG + STCG) = ______________
Use this if (LTCG + STCG) is less than Total Cash received.
J. Shares of Newell Brands Received = .862 x (# total of Jarden Corp shares owned) = _________________. (For the merger transaction)