Procter & Gamble Takes Over Gillette

28/05/01 - Procter & Gamble Company announced today that it has purchased The Gillette Company for approximately $57 billion US. The move will create the world`s largest consumer goods company and is the largest acquisition in P&G history. Gillette markets a number of category leading consumer products such as Gillette razors and blades, Duracell batteries, Oral-B, Braun shavers and small appliances.

A.G. Lafley, Chairman, President and Chief Executive Officer of Procter & Gamble says both companies are operating from a position of strength and “"This combination of two best-in-class consumer products companies, at a time when they are both operating from a position of strength, is a unique opportunity,"

Under terms of the agreement, unanimously approved by the board of directors of both companies on January 27, P&G has agreed to issue 0.975 shares of its common stock for each share of Gillette common stock. Based on the closing share price of P&G and Gillette stock on January 27, 2005, this represents an 18% premium to Gillette shareholders.

P&G will acquire all of Gillette`s business, including manufacturing, technical and other facilities. The transaction, which is subject to certain conditions including approval by Gillette`s and P&G`s shareholders and regulatory clearance, is expected to close in fall 2005.

In addition, P&G and its subsidiaries plan to buy back $18 to $22 billion of P&G`s common stock during the next 12 to 18 months. Over time, this will essentially result in a total financial impact on the company as if the deal were structured with approximately 60% stock and 40% cash.

The new company formed from the combined Procter & Gamble and Gillette will create a portfolio of $21 billion dollar brands and have the top global market position in categories representing about two-thirds of total sales.

Long-term sales growth is expected to rise and both companies have expertise in health and personal care. P&G’s strength comes from its women’s personal care brands which include Olay, Always, Tampax, Cover Girl and Max Factor whereas Gillette has had a deep knowledge in the men’s grooming category. Gillette and P&G also share complementary technology platforms in skin care, especially between the Oral-B and Crest brands.

The new combined company is expected to increase annual sales growth targets, increase opportunities for more innovation and provide cost saving synergies.

To contact our editorial team please email us at editorial@cnsmedia.com