P&G sharpens cutting edge
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Manufacturing News, Source : The Manufacturer US
Published : 14 Mar 2005 21:18
Manufacturing giant Procter & Gamble announced that it has signed a deal to acquire The Gillette Company for $57 billion, creating the world’s largest consumer products company.
Manufacturing giant Procter & Gamble announced that it has signed a deal to acquire The Gillette Company for $57 billion, creating the world’s largest consumer products company.
The transaction is easily the largest in P&G history. 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.
The merger is expected to strengthen the bargaining positions of both manufacturers against powerful retailers such as Wal-Mart, which is well-known for dictating strict terms to smaller suppliers.
“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,” said A.G. Lafley, chairman, president and chief executive of P&G.
P&G has 16 billion-dollar brands. Gillette brings five more. P&G had sales of more than $51.4 billion in 2004. Among its many brands are Olay and Noxzema creams, Cover Girl and Max Factor cosmetics, Head and Shoulders shampoo, and Pampers and Luvs diapers. Gillette markets a number of category-leading consumer products such as Gillette razors and blades, Duracell batteries, Oral-B toothbrushes, and Braun shavers and small appliances. In its most recent quarter, Gillette reported income of $475 million, up from $416 million, due in part to hurricanes in the South boosting battery sales.
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