P&G to acquire Gillette for US$57 billion
{{byline|date=January 28, 2005|location=[[w:New York|New York]]}}
[[US|American]] manufacturing giant {{w|Proctor & Gamble}} (P&G) plans to acquire {{w|Gillette Co.}} for [[US$]]57 billion in stock. The purchase plan calls for P&G to swap 0.975 shares of its stock per share of Gillete Co. P&G also announced a stock buyback program in which they would purchase up to US$22 billion of shares over the next 18 months. Including the stock buyback program, the merger is being financed by 60 percent stock and 40 percent cash.

P&G is known for brands such as {{w|Ariel (detergent)|Ariel}} and {{w|Tide (brand)|Tide}} washing powder, {{w|Max Factor}} cosmetics, {{w|Pringles}} potato crisps (chips) and {{w|Hugo Boss}} and [[Lacoste]] perfumes.

Gillette, known for brands such as {{w|Gillette}} razors, {{w|Oral B}} dental care, and {{w|Duracell}} batteries, has had growing problems with the growth of private labels and price cuts demanded by large supermarkets.

After the acquisition is completed, Gillette's CEO {{w|James M. Kilts|James Kilts}} will be P&G's vice-chairman. Kilts said that he expects that this acquisition will cause additional mergers to take place.

"I believe the consumer product industry needs to consolidate," said Kilts, "we believe we can bring these companies together and create a juggernaut."

P&G and Gillette have a combined market capitalization of about $185 billion US, which will make it the largest in the sector.

===Layoffs===
The early morning announcement states that 6,000 employees will be eliminated. Most of the layoffs will result from reducing overlapping management positions and other supporting positions within the combined company.

Antitrust regulators in the US and [[Europe]] plan to review the acquisition, to determine whether the combined company will have too much power over pricing and shelf space.

P&G plans to provide additional details about the merger Friday morning (East Coast time) in [[New York City|New York]].

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== References ==
*{{source|url=http://news.bbc.co.uk/1/hi/business/4214485.stm |title= P&G to acquire Gillette for $57bn|author= |pub=BBC News |date=January 28, 2005 }}
*{{source|url=http://money.cnn.com/2005/01/28/news/fortune500/pg_gillette.reut/index.htm?cnn=yes|title= P&G buys Gillette for $57B|author= |pub=CNN Money |date=January 28, 2005 }}
*{{source|url=http://phx.corporate-ir.net/phoenix.zhtml?c=104574&p=irol-newsArticleMain&ID=667876|title= P&G Acquires The Gillette Company|author= |pub=Proctor&Gamble (press release)|date=January 28, 2005 }}
*{{source|url=http://www.cbc.ca/news/story/2005/01/28/procter050128.html|title=Procter & Gamble to buy Gillette|author= |pub=CBC News|date=January 28, 2005 }}

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[[Category:United States]]
[[Category:Economy and business]]
[[Category:North America]]
American manufacturing giant Gillette Co. for US$57 billion in stock. The purchase plan calls for P&G to swap 0.975 shares of its stock per share of Gillete Co. P&G also announced a stock buyback program in which they would purchase up to US$22 billion of shares over the next 18 months. Including the stock buyback program, the merger is being financed by 60 percent stock and 40 percent cash.

P&G is known for brands such as Ariel and Tide washing powder, Pringles potato crisps (chips) and  and Lacoste perfumes.

Gillette, known for brands such as Oral B dental care, and  batteries, has had growing problems with the growth of private labels and price cuts demanded by large supermarkets.

After the acquisition is completed, Gillette's CEO James Kilts will be P&G's vice-chairman. Kilts said that he expects that this acquisition will cause additional mergers to take place.

"I believe the consumer product industry needs to consolidate," said Kilts, "we believe we can bring these companies together and create a juggernaut."

P&G and Gillette have a combined market capitalization of about $185 billion US, which will make it the largest in the sector.

Antitrust regulators in the US and Europe plan to review the acquisition, to determine whether the combined company will have too much power over pricing and shelf space.

P&G plans to provide additional details about the merger Friday morning (East Coast time) in New York.
United States Economy and business North America