P&G&G

In a deal between two of the country’s largest consumer products manufacturers, The Procter & Gamble Co. (Cincinnati) has announced a deal to acquire 100 percent of The Gillette Co. (Boston).

The transaction, valued at approximately $57 billion, makes it the largest acquisition in P&G history. P&G has agreed to issue 0.975 shares of its common stock for each share of Gillette common stock. Based on the closing share price of P&G and Gillette stock on Jan. 27, 2005, this represents an 18 percent premium to Gillette shareholders.

P&G will acquire all of Gillette’s business, including manufacturing, technical and other facilities. The transaction, which is subject to certain conditions including approval by Gillette’s and P&G’s shareholders and regulatory clearance, is expected to close in fall 2005.

Gillette, founded in 1901, markets a number of category-leading consumer products such as Duracell batteries, Oral-B manual and power toothbrushes, and Braun shavers and small appliances, in addition to its iconic and hugely successful lines of razor blades and shaving creams and Right Guard deodorant.

Procter & Gamble, the No. 1 U.S. maker of household products, markets such worldwide brands as Pampers, Tide, Ariel, Always, Whisper, Pantene, Bounty, Pringles, Folgers, Charmin, Downy, Lenor, Iams, Crest, Actonel, Olay, Tampax, Cover Girl, Max Factor, Clairol Nice ‘n Easy, Head & Shoulders and Wella. Sixteen of its brands are billion-dollar sellers.

“This combination of two best-in-class consumer products companies, at a time when they are both operating from a position of strength, is a unique opportunity,” said Procter chairman, president and ceo A.G. Lafley. “Gillette and P&G have similar cultures and complementary core strengths in branding, innovation, scale and go-to-market capabilities, making it a terrific fit. We are pleased James M. Kilts, Gillette’s chairman, ceo and president, will join P&G’s board and serve as P&G vice chairman, Gillette.”

“This marks the realization of an historic next phase of great opportunity for Gillette and also for P&G,” said Kilts. “It brings together two companies that are complementary in their strengths, cultures and vision to create the potential for superior sustainable growth.”

“This merger is going to create the greatest consumer products company in the world,” said Warren E. Buffett, chairman and ceo of Berkshire Hathaway Inc. (Omaha, Neb.), Gillette’s largest shareholder. “It’s a dream deal.”