P&G Acquisition Gillete

DAVID P. STOWELL

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KEL183
Revised July 2007

The Best Deal GiIlette Could Get?
Proctor & lay on the lines Acquisition of Gillette

A Dream Deal

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January 27, 2005, was an extraordinary daytime for Gillettes James Kilts, the show-stopping
turnaround expert known as the Razor Boss of Boston. Kilts, along with Proctor & Gamble
chairman Alan Lafley, had provided orchestrated a $57 billion acquisition of Gillette by P&G. The
creation of the worlds largest consumer products company would suppress Kiltss four-year tenure as
CEO of Gillette and bring to a conterminous Gillettes 104-year history as an independent corporate titan
in the Boston area. The deal also capped a serial publication of courtships between Gillette and other
companies that had waxed and waned at various points throughout Kiltss stewardship of Gillette.
But al well-nigh immediately after the transaction was announced, P&G and Gillette drew criticism
from the media and the state of Massachusetts concerning the terms of the sale. Would this
merger actually benefit shareholders, or was it principally a wealth creation vehicle for Kilts?

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Proctor & Gamble was known for its consumer products bid soap, shampoo, laundry
detergent, and food and beverages, as well as products for health and strike care.



1 The company
owned a portfolio of approximately 150 brandsâ€"ranging from Ace bleach to Zest soapâ€"
including some of the worlds most recognizable: Pampers, Tide, Folgers, Charmin, Crest, Olay,
and Head & Shoulders.2 Gillette was best known for its razor business, solely the company
controlled two other brandsâ€"Oral-B toothbrushes and Duracell batteriesâ€"that produced at least
$1 billion in annual revenue (see Exhibit 1). Whereas P&G was curiously skilled in marketing
to women,3 Gillettes core customer surgical incision was men (with the memorable marketing tagline
The Best a serviceman Can Get). Gillette had expanded into female product lines with its genus Venus razor,
and P&G also had several brandsâ€"Head &...If you indigence to get a full essay, order it on our website: Orderessay



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