The Sale to Procter & Gamble
On February 28th, 2005, Gillette was awash to Procter and Gamble for $57 billion. Gillette is based in Boston and was founded in 1901. It sells articles in over 200 countries in 31 accomplishment plants in 14 countries. It is one of the arch accomplishment firms larboard in Boston. Procter and Gamble are based in Cincinnati, accustomed in 1837 by William Procter and James Gamble and was congenital in 1905. To date, it has awash added than 300 brands of articles in added than 160 countries. Because of the antagonism in this industry, Procter and Gamble anticipation it was a acceptable abstraction to buy out Gillette. They had already noticed that Walmart had the better allotment of Procter & Gamble’s acquirement (17%) and this would abound to 30% afterwards the merger. Also, there would be a amount accumulation of $14 to $16 billion a year and a 1% access in sales advance afterwards the merger.
One of the key issues is that 6,000 advisers of Gillette would be accident their jobs. Another key affair is that severance bales from these kinds of mergers accept been apparent to be too high. For example, back Manulife Financial Corporation alloyed with John Hancock Financial Services, the Chief Financial Officer from John Hancock, David D’Alessandro, accustomed a amalgamation of $16.4 million. Back Bank of America bought Fleet Boston Financial Group, Chad Gifford (CFO of Fleet Boston) got $16 million. Now, Gillette’s James Kilts is accepting a severance amalgamation of $30 actor and could acquire $172 actor in banknote and stock. In fact, $50 actor of the advantage amalgamation was anon angry to the merger. A lot of academics did not accede with this adjustment because they accept it should be angry to the achievement of the aggregation and not to the merger. Another affair is that advisers of Gillette were already accusatory about arbitrary alive altitude and retirees were activity to accept to pay added for healthcare afterwards the merger.
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