The Procter & Gamble Acquisition of Gillette (PDF)

Seminar paper from the year 2006 in the subject Economics - Industrial Economics, grade: 1,0, Wayne State University (Department of Economics), course: Industrial Organization, language: English, abstract: In January 2005, the Procter & Gamble Company (P&G) announced that it signed a deal to buy 100% of the shares of the Gillette Company. The transaction was valued at approximately $57 billion making it the largest acquisition in P&G history. "This combination (...), 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 strength in branding, innovation, scale and go-tomarket capabilities, making it a terrific fit," said P&G chairman and chief executive A.G. Lafley. Since the proposed acquisition was to be creating the world's largest consumer-products company with more than 140,000 employees and annual sales of $60 billion, pushing European rival Unilever into second place, competition agencies like the European Commission (EC) and the Federal Trade Commission (FTC) notified the deal. 1 The complaint was that the concentration creates or strengthens a dominant position, especially in overlapping markets of both firms and therefore anticompetitive effects like increasing prices would appear. [...]