Gillette Case Analysis

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Robert Carril Advanced Strategic Management Spring 2011 4/19/2011 The Best Deal Gillette Could Get? Background Gillette, the consumer products corporate entity based out of Massachusetts had a 100 plus year history and was best known for its razor business, but the company also controlled several other consumer products brands including Oral-B toothbrushes and Duracell batteries. These two businesses alone produced about $2 billion in annual revenue and complemented Gillette’s consumer product brand line-up. Proctor & Gamble (P&G) was a consumer products corporate giant as well and was well known for its various brands and products within the soap, shampoo, laundry, detergent, and food and beverages industries. P&G also had a strong presence in the health and beauty care segments which complemented and sometimes overlapped several products at Gillette. In total, P&G owned a portfolio of approximately 150 well-known brands throughout several different consumer segments. On January 27, 2005, James Kilts, CEO of Gillette and Alan Lafley, CEO of Proctor & Gamble had orchestrated a $57 billion acquisition of Gillette by Proctor & Gamble. The acquisition would in effect create the world’s largest consumer products company and likely bring an end to several aggressive and non-aggressive acquisition attempts of Gillette over the past several decades. The announcement of the proposed acquisition initiated an instant investigatory response from several stakeholders involved, expressly shareholders, media, and state and federal government regulatory bodies which swooped in on the transaction. Key Problem With several key participants in the transaction all standing to reap huge payouts, was this proposed merger and acquisition a fair deal for Gillette shareholders or was it mainly a money making deal for a specific few? This was the question on several

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