Presented By: Ankur Rohit Mitra Neha Trivedi

Vinay Pakhale

Company Profiles

P&G

• Crest• Tide• Head & Shoulders• Olay• Pampers• Dynamo• Wella• Febreze• Tampax• Swiffer• Ajax• Vicks• Pringles

Gillette

• Gillette• Braun• Oral-B• Duracell• Right Guard

P&G• On October 31, 1837, Procter & Gamble was born. (William

Procter and James Gamble). • A multinational corporation headquartered in downtown

Cincinnati, Ohio and manufactures a wide range of consumer goods.

• P&G is a global manufacturer of consumer goods, including household care, beauty care, health, baby and family care products.

• In 2011, P&G recorded $82.6 billion dollars in sales.• In 2011, Fortune magazine ranked P&G at fifth place of the

"World's Most Admired Companies" list. • Procter and Gamble is a tier one sponsor of the London's

Olympic Games 2012 and sponsors 150 Athletes.

Gillette• The original Gillette Company was founded by King Camp

Gillette in 1901 as a safety razor manufacturer.• The Gillette brand is synonymous with shaving and

personal care products.• King Gillette sought protection of his fledgling business

for safety razors when he applied for the trademarks for razors and razor blades, soap, and shaving brushes on Wednesday, May 27, 1908.

The Deal• Procter & Gamble employs a workforce of 110,000 worldwide

and has a market capitalization of $141 billion. Gillette employs 29,400 employees worldwide and has a market capitalization of $45 billion.

• Merrill Lynch & Co. acted as financial advisor and Cadwalader, Wickersham & Taft, LLP acted as legal counsel to P&G.

• UBS and Goldman Sachs acted as financial advisor and Davis, Polk & Wardwell acted as legal counsel to Gillette.

• The transaction was valued at approximately $57 billion (USD) based on closing NYSE stock prices of Jan. 27, 2005.

• “On 27 May 2005, the Commission Of European Community received a notification of The Procter & Gamble Company P&G, USA) acquires The Gillette Company (Gillette, USA) by (̀�

way of purchase of shares.”

• The acquisition was approved by the European Union and the Federal Trade Commission, with conditions to a spinoff of certain overlapping brands. P&G agreed to sell its SpinBrush battery-operated electric toothbrush business to Church & Dwight. It also divested Gillette's oral-care toothpaste line, Rembrandt. The deodorant brands Right Guard, Soft & Dri, and Dry Idea were sold to Dial Corporation. The companies officially merged on October 1, 2005. Liquid Paper, and Gillette's stationery division, Paper Mate were sold to Newell Rubbermaid. In 2008, P&G branched into the record business with its sponsorship of Tag Records, as an endorsement for TAG Body Spray.

The Concentration

• The proposed concentration was effected through a merger between a wholly-owned subsidiary of the Procter & Gamble Company, Aquarium Acquisition Cooperation, formed for the purpose of the contemplated merger, with the Gillette Company. As a result, Gillette will continue as the surviving operating unit and will become a wholly owned subsidiary of P&G. The operation consist in the acquisition of sole control of Gillette.

• EXCHANGE RATIO- Each Gillette common share was converted into the right to receive 0.975 shares of P&G common stock. Valuing the stock at $53.94 -- a premium of about 18 percent.

• The offer valued Gillette's shares at about $54 a share.• Gillette shares held in the Buy DIRECT Plan, including dividend

reinvestment shares, are being automatically converted into the P&G Shareholder Investment Program (“SIP”) at the 0.975 rate.

• Gillette shares held in the Direct Registration System (“DRS”) are being automatically converted into whole shares of P&G common stock in DRS form.

• Shareholders of both companies overwhelmingly approved P&G's acquisition of Gillette that would form the world's largest consumer products company, with such brands as P&G's Pampers and Gillette's line of razors. In announcements at separate special meetings, the companies said 96 percent of the shares that were voted favored the merger.

• News of the deal sent Gillette’s shares soaring $5.49, or 12 percent, to $51.17 in very heavy trading on the New York Stock Exchange, while P&G’s fell $1.50, or 2.7 percent, to $53.82 also on the NYSE.

• On Wall Street, shares in Gillette closed up nearly 13% , while P&G slid 2.1%.

• Involved 6,000 job cuts, 4% of the combined workforce of 140,000. Company expected to reap $14 Billion in cost savings.

• Mr. Buffett owns about 33% of Berkshire Hathaway which in part owns 10% of Gillette. And at the end of the merger, he would be receiving 93million shares of the new company.

• Regulatory Concerns: P&G’s focus on more valuable brands has led to it shedding a number of ailing lines. It has sold off Sunny Delight, Sure deodorant and several detergents, and there is speculation that Lafley will soon dispose of underperforming brands from the Gillette business.

The Unique Combination

• Remarkable similarities in organizational structure.• Highly complimentary brand, markets and

technologies.• Both companies going into great momentum going

into the merger.• P&G and Gillette would have 21 brands with more

than $1 billion in annual sales each.

Synergy

Why P&G Acquire Gillette?• The Gillette Company was the market leader in several

product categories including blades & razors, oral care and batteries.

• Gillette has recorded a strong earnings since 2001 and in the most recent quarter before the acquisition Gillette recorded income of $475 million, making it a rich company.

• More consumers are traded up to its pricier M3 power Razor and series of hurricanes in the boosted battery sales.

• Gillette was strong in emerging markets like India and Brazil where P&G has been always outperformed by Unilever.

• P&G is already the world's largest consumer products company, but the addition of Gillette gives it new clout with retailers, including the world's largest, Wal-Mart.

Is This Deal a Success?

• Most of Gillette's senior managers have left the company.

• P&G's stock has lagged behind key competitors', including Colgate-Palmolive Co. and Unilever.

• The recession buffeted Gillette's core business -- pricey razors and blades.

• P&G's stock is up 12% since the day before the deal was announced in 2005 but down 8% over the same period. But it's worse than two of the three competitors most directly affected by the deal, including Colgate-Palmolive Co. (up 53%) and Unilever (up 36%).

• However, the deal was aright step, at the right time and with the right partner.

Thank You