Mergers, Acquisitions, Alliances and Synergies Case Study

Case Title:

Gillette's Merger with P&G : The Strategic Fit?

Abstract:
Procter & Gamble (P&G), the number one US consumer goods company, and Gillette, the world's largest manufacturer of shaving products, announced the merger of their operations in January 2005. The $57 billion merger was the ninth largest in the US corporate history. Post-merger, the new company would dethrone Unilever as the world's largest producer of consumer goods and is expected to have bargaining power rivaling that of global retailers like Wal-Mart and Carrefour. The merger, scheduled to be completed in late 2005, is expected to reap cost synergies of up to $22 billion for the new company. But the problems encountered by Daimler-Chrysler and Hewlett Packard-Compaq's mergers showed that size could be a potential hindrance to the success of a merger.

Pedagogical Objectives:

• To discuss the potential synergies that P&G can gain from the merger
• To analyse the problems it is likely to face in the course of the merger's successful execution.

Keywords :  Procter & Gamble Company (P&G);Mergers,Acquisitions,Alliances Case Study; Gillette Company (Gillette); Consumer product companies; Consumer goods industry; Merger of equals; World’s largest FMCG (Fast Moving Consumer Goods) company; Cost synergies; Billion dollar brands; Wal-Mart effect; Strategic fit; Industry consolidation; Risk of execution failure; Cross-cultural competence; Colgate Palmolive; Unilever