Procter And Gambles Acquisition of Gillette
Company and Situation
The deal is a bold move by P&G Chief Executive A.G. Lafley, who has led the company out of dark times over the past four years. Moving too fast on a restructuring plan implemented by former CEO Jager, the company posted several disappointing quarters and its stock lost more than half its value in 2000. The merger, would create a company with revenues of more than $60 billion that would have even greater clout against mass-market retailers like Wal-Mart Stores Inc., which have been pressuring consumer product suppliers to keep costs low. Lafley was optimistic that the company would not be forced to divest many properties as part of an antitrust review.
On October 1, 2005, the completion acquisition of The Gillette Company. Pursuant to the acquisition agreement, which provided for the exchange of 0.975 shares of The Procter & Gamble Company common stock, on a tax-free basis, for each share of The Gillette Company, we issued 962 million shares of The Procter & Gamble Company common stock. The value of these shares was determined using the average Company stock prices beginning two days before and ending two days after January 28, 2005, the date the acquisition was announced. We also issued 79 million stock options in exchange for
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There is a danger that the larger a firm gets, the more unwieldy and harder to manage it becomes. There are also suggestions that Gillette could be at the crest of its wave. P&G may believe that it can squeeze more value out of Gillette's brands. On the other hand, the costs of product innovation are high for razors and there are suggestions that consumers may be getting fed up with having to pay ever-increasing sums for razors with ever more blades. Gillette has admitted in the past that it fears competition from low-cost rivals, particularly at its Duracell electric-battery
1. How was Lincoln able to grow and prosper for so long in such a difficult commodity industry that forced out other giants such as General Electric, Westinghouse and BOC? What is the source of Lincoln’s outstanding and enduring success?
Gaughan, P. A., 2002. Mergers, Acquisitions, and Corporate restructuring. 3rd ed.New York: John Wiley & Sons, Inc.
There is always room for improvement and innovation. Over the years, The Clorox Company has found ways to reach out to the public for input, and new ideas. They established “a cross functional new ventures team that is charged with looking externally to find the next big new products and ideas” ( p.80). They do not just come up with ideas, instead they find what can be improved and what consumers want to see (). The strategy is efficient, because the more they create products consumers want to see, the more the products are
P&G employees needed a face lift and fast. A.G. Lafley, a Harvard graduate who spent his entire career with P&G was named CEO. He showed P&G employees that a family culture within the company was still attainable. Lafley focused on the employees and ensured the employees maintained focus on the consumers, as consumers are the basis of the market. He slowly began to change the old views of P&G. Not long after Lafley's appointment to CEO he replaced more than half of the company's top 30 officers and cut 9,600 jobs. P&Gs old view of internal creation was halted by Lafley. He acquired Clairol in 2001; P&Gs largest acquisition in its history. He also outsourced P&G's information-technology operation to help maintain its focus on the consumer and its brands. Lafley was able accomplish these non-traditional moves without alienating the family that was P&G.
For this reason, Gillette has always been trying to innovate in the market with new products. But they did not want their product to be bought just because they are a novelty but because it was perceived by the customer as a good quality product and have a staying power and product loyalty. This can be illustrated by the launch of the “Fusion” product by Gillette.
This case examines issues of asset control for Ben & Jerry’s Homemade, Inc., in light of the outstanding takeover offers by Chartwell Investments, Dreyer‘s Grand, Unilever, and Meadowbrook Lane Capital in January 2000.
During 1911, Proctor and Gamble introduced Crisco, the first all-vegetable shortening, beginning what would be the first in a long line of different unrelated products the company would develop in the future. Such products include Tide washing detergent, Crest toothpaste, Charmin toilet paper, Pampers baby diapers, Folgers coffee, Bounce fabric softener, Pert Plus shampoo, and Bounty paper towels, just to name a few. With these products, and the more than thousand others, Proctor and Gamble leads the world in sales in almost all categories of household products. Sales hit the one million mark by 1859, roughly 22 years after the company was formed.
Sewell, Dan. “P&G increasing sales with big brands, new products.” October 27, 2010. November 9, 2010
Two attacks came as hostile takeover bids from Revlon who had a reputation for breaking apart companies. The third attack came from Coniston Partners, an investment group that bought 5.9 per cent of Gillette stock and initiated a alternative battle to seize control of the board, hoping Gillette would sales the company to the highest bidder and pocket a quick gain on their shares. Looking at a $2.3bn short-term share profit across 116 million shares, most executives would have capitulated, pocketing millions from flipping their own stock and cashing in on generous golden parachutes. He concentrated on a limited number of promising markets, particularly high-volume, repeat-purchase consumer items, selling Ziegler's least successful acquisitions, pumping money into promising companies compatible with already-existing manufacturing or distribution capabilities
market with the acquisition of the Portland general corporation. The merger was the first of
Anheuser-Busch, an American brewing company of St. Louis, MO, sold itself to a rival European brewery, InBev, on July 14, 2008 for $70 per share. The $52 billion dollar offer will be paid for by InBev with cash, making it the largest to date cash transaction ever recorded. The merger of the two firms would create the largest brewery globally and would combine the brands of Anheuser-Busch which include Budweiser and Michelob with the likes of Stella Artois, Brahma, Bass, and Beck’s provided by InBev. The firms are expected to experience a significant cost savings of $1.5 billion per year by 2011 and experience overall profit gains by 2010, based on a company announcement. The transaction, will allow the Anheuser-Busch brands to expand their brand globally and allow them to reach new markets, something that will help Anheuser-Busch specifically who has struggled with market penetration outside of the U.S. InBev on the other hand, will benefit from the established name brand of Anheuser-Busch as well as Anheuser-Busch’s core competency of advertising which should allow InBev to expand its reach even further. InBev is expected to maintain management of Anheuser Busch and keep all of its breweries in the U.S. open, while also giving Anheuser Busch two seats on the combined firm’s board. InBev is expected to finance the acquisition with $45 billion worth of debt and issue $9.8 billion worth of new shares. The markets reacted positively to the announcement with Anheuser shares rising .8%, while rising 8.6% on July 11th the Friday before the transaction announcement. Inbev, however, was down 3.4%.
Proctor and Gamble is a multinational company and in 2015 with 35% value share, it was leading men’s cosmetics market. It held 67% value share in men’s grooming. Companies success is attributed to its Gillette- a leading Brand in Men’s shaving category. With new innovations which are supplemented by large marketing campaigns, a company had maintained its powerful position of Brands. Such as Fusion ProShield razors were launched by Gillette in 2015.(reference)
The transnational corporation Nestle Company founded in 1886 based in Vevey, Switzerland, sells its products in 189 countries and has manufacturing plants in 89 countries around the world, boasting an unmatched geographic presence. The company started off as an alternative to breastmilk and initially looked into other countries for an increase in global opportunities. It founded its first out of country offices in London in 1868, and due to the small size and inability of Switzerland to compensate growth manufacturing plants were built in both Britain and the United states in the late nineteenth century. A large portion of Nestlé’s globalization came in the 1900s which was when it first moved into the chocolate business after
L’Oreal business got four important factors. The first one is universal; L’Oreal organization operating model and sales promotion are support universalization. While the organization not only keeping the global brand across the world but also L’Oreal are able to improve local economic and development. The second one is innovation, which is key development of organization, the organization itself to develop innovate. The third one is nimble; obviously, beauty is fast changed business in the industry. L’Oreal always find new chance in different field; such as markets and e-business. The last one is entrepreneurial; the unique aspect of L’Oreal is each business has independent sales distribution; business model and profitability logic. (Who we