Best Deal Gillette Analysis
Five years later—the acquisition by P&G hasn’t paid off —yet
• Gillette’s businesses have been a drag for P&G
• Sales growth projections have been under met
• Most of Gillette 's senior managers have left.
• P&G 's stock has lagged behind key competitors ', including Colgate-Palmolive Co. and Unilever
• Efforts to expand Gillette and Venus brands have not been too successful-fewer people shave since they’re unemployed or don’t go out as much
• There have been more international success (Europe, Brazil, Asia
KEY STAKEHOLDERS:
Top management-asked to take lower-profile positions or even forced out
Employees-fear of workforce reductions (loss of 4% of workforce)
Politicians-concerned with longterm social and economic impact that reduced employment can have on a community(Massachusetts)
Shareholders-fear that the offer price may not be adequate compensation
Regulators-make sure there isn’t violation of state and federal laws, including antitrust laws
1) Executive Summary (including your recommendation)
This proposed acquisition of Gillette by Proctor & Gamble would make P&G the world’s largest consumer Products Company. P&G was known for its consumer products (approximately 150 brands) including some of the worlds most recognizable and Gillette was known for its razor business and also controlled two other brands. With P&G predominately marketed for women and Gillette marketed mainly for men, most people dubbed this “the perfect marriage”-a way to effectively reach both their male and female consumer segments worldwide.
It was a chance to combine complementary business lines and an ability to create an industry leader that could better negotiate with larger retailers (like Wal-Mart and Target)as far as control pricing and product placement in superstores nationwide.
2) A Statement of the Problem(s) you see the firm or decision maker facing
Kilt’s compensation package totaling $164M; “Change of Control” clause
Conflict of interest that
• Gillette’s businesses have been a drag for P&G
• Sales growth projections have been under met
• Most of Gillette 's senior managers have left.
• P&G 's stock has lagged behind key competitors ', including Colgate-Palmolive Co. and Unilever
• Efforts to expand Gillette and Venus brands have not been too successful-fewer people shave since they’re unemployed or don’t go out as much
• There have been more international success (Europe, Brazil, Asia
KEY STAKEHOLDERS:
Top management-asked to take lower-profile positions or even forced out
Employees-fear of workforce reductions (loss of 4% of workforce)
Politicians-concerned with longterm social and economic impact that reduced employment can have on a community(Massachusetts)
Shareholders-fear that the offer price may not be adequate compensation
Regulators-make sure there isn’t violation of state and federal laws, including antitrust laws
1) Executive Summary (including your recommendation)
This proposed acquisition of Gillette by Proctor & Gamble would make P&G the world’s largest consumer Products Company. P&G was known for its consumer products (approximately 150 brands) including some of the worlds most recognizable and Gillette was known for its razor business and also controlled two other brands. With P&G predominately marketed for women and Gillette marketed mainly for men, most people dubbed this “the perfect marriage”-a way to effectively reach both their male and female consumer segments worldwide.
It was a chance to combine complementary business lines and an ability to create an industry leader that could better negotiate with larger retailers (like Wal-Mart and Target)as far as control pricing and product placement in superstores nationwide.
2) A Statement of the Problem(s) you see the firm or decision maker facing
Kilt’s compensation package totaling $164M; “Change of Control” clause
Conflict of interest that