Stanley to buy Black & Decker

Tool deals don't get much bigger than this: Stanley agreed to buy Black & Decker in an all-stock transaction valued at about $4.5 billion.

The merger of the two giants will create an $8.4 billion player in power tools, fasteners, hardware and home improvement products. The companies announced the plans Monday afternoon. 

Stanley's John Lundgren and Black & Decker's Nolan Archibald will both remain in key positions. Lundgren will be president and CEO of the combined company, while Archibald will be executive chairman of the combined company for three years. The new entity will continue to operate out of both Towson, Md., and New Britain, Conn. -- headquarters of Black & Decker and The Stanley Works, respectively.

"Joining these two companies together creates a powerful engine for growth, both as markets around the world recover and over the long-term," said Lundgren.

The companies point to $350 million in estimated annual cost synergies to be realized in about three years.

The transaction remains subject to regulatory approvals and approval of Stanley and Black & Decker shareholders, according to the press release announcing the deal.