I would like to obtain the following formatting.

You could (ab-) use chemmacros's redox macros:
% arara: pdflatex
% arara: pdflatex
\documentclass{scrartcl}
\usepackage{chemmacros}
\begin{document}
\begin{equation}
\OX{first,$k$}(\OX{second,$a$}+\OX{third,$b$}) = ka + kb
\end{equation}
\redox(first,second)[->]{$\times$}
\redox(first,third)[->][-1]{$\times$}
\end{document}

\scriptsize to the two instances of $\times$, the multiplication symbol's size would be (slightly) better proportioned.
– Mico
Jun 24 '12 at 12:11