Like all the best craftsmen, they took their time — nearly 30 years, in fact — but when Stanley Works and Black & Decker dovetailed their operations, blew off the dust and displayed the finished product this week, analysts were impressed.

So much so that they now believe that the $350 million (£211 million) the two companies hope to achieve in cost savings over the next three years, adding a hoped-for $1 to earnings per share, is probably too modest.

The two DIY businesses were seen as such a natural fit that shares rocketed on Tuesday, the day after the deal was announced — Stanley by 10 per cent and Black & Decker by 31 per cent. Those gains remained intact at the end of the week. Black & Decker’s $3.5 billion acquisition by Stanley was compelling because there is very little overlap between their ranges, but many of their products sit side by side in the same stores and use similar distribution channels. Basically, they sell different stuff to the same people. What’s not to like about that?

Stanley was established in 1843 by Frederick Trent Stanley, who founded a small hardware manufacturing shop in New Britain, Connecticut, where the company is still based. It has since become known the world over as a maker of fine hand tools, with brands including Bostich and Stanley itself.

Black & Decker was founded in 1910 by S. Duncan Black and Alonzo G. Decker, who opened a small machine shop in Baltimore, Maryland, that grew into a global specialist in power tools, with brands that include Black & Decker, DeWalt, Kwikset and Delta.

With little product overlap, integration becomes a lot easier, regardless of size, Kenneth Zener, an analyst with Macquarie Equities Research, said. While the businesses will have to work hard at eliminating management channels, they will not have to touch their products much, if at all.

“It’s all low-risk cost-cutting,” Mr Zener said. “They don’t need two HR departments, they don’t need two chief financial operators, two chief operating officers or, for that matter, two chief executives.”

This latter point might help to explain why the merger did not did not happen sooner over the 28 years that the two companies have held off-and-on merger talks. Who would run the combined company was always an issue, according to Roger Young, a Black & Decker spokesman. However, at 65, Nolan Archibald, chief executive of Black & Decker for 24 years and one of the longest-serving corporate bosses in America, finally appears ready to relinquish power. He will serve as executive chairman, while John Lundgren, the head of Stanley Works, will be chief executive of the new combined group.

Mr Archibald waived a cash severance payment of $20 million that was due to him as a result of the sale. That said, since he owns 4 per cent of Black & Decker, he stands to benefit by $25 million from the premium he persuaded Stanley to pay.

Mr Archibald insisted that the merger was “nothing to do with the current economic situation”, but it is clear that both companies have suffered from the housing slump and are betting that, together, they can better position themselves for a recovery.

Job cuts are expected to reach 4,000, or about 10 per cent of the combined workforce. The company has no estimate yet of possible reductions in its 500-strong British workforce.

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