Proctor & Gamble acquires Gillette for $57bn

Proctor & Gamble (P&G) has acquired Gillette in a $57 billion deal, which will make them the number one consumer products company in the world.

P&G, whose extensive portfolio of products includes Pampers nappies, Pantene shampoo, Pringles crisps and Crest toothpaste, has acquired all of Gillette's businesses, manufacturing, technical and other facilities. This includes the company's extensive product portfolio, including such top-selling products as the Mach3 and Venus razors, Duracell batteries and Oral-B toothbrushes. The combined company portfolio will boast 21 billion-dollar brands.

The transaction, which is subject to certain conditions, including approval by both companies' shareholders and regulatory clearance, is expected to close in Autumn 2005.

Commenting on the deal, A.G. Lafley, chairman, president and chief executive of P&G, said: "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. 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."

P&G has raised its annual sales growth target from 4%-6% to 5%-7%, following the deal. The company has also stated that the combination provides future upside potential to its double-digit annual earnings growth target.

The deal has already been welcomed by Gillette's largest shareholder. Warren E. Buffett, chairman and CEO of Berkshire Hathaway Inc, said: "This merger is going to create the greatest consumer products company in the world. It's a dream deal."

(KMcA/SP)