Procter & Gamble Vs. Gillette

What is Proctor & Gamble's corporate strategy? The company's business seems to be related or irrelevant. Whether Gillette's business is closely related to P & G's business. Merger with Gillette will bring 1 + 1 = 3 effect to P & G. Procter & Gamble recently completed large scale business restructuring, implemented new management, and reduced capital investment requirements. Since then, we have shifted our business portfolio to a higher margin, reduced capital-intensive healthcare and beauty care industries, targeted consumers in developing and low-income brackets, then focused on increasing revenue and earnings It is.

Due to the merger of P & G and Gillette, P & G decided to exchange 0.975 shares of common stock per Gillette. Procter & Gamble decided to buy back its common stock after the merger. This is 18 to 22 billion dollars. This will result in a deal of 60% of the stock and 40% of the cash deal. Both companies believe that the merger will bring great synergistic effect because both are the best companies and we believe that the combination of both companies will bring a powerful brand portfolio. After the merger, Gillette has increased opportunities to sell its products in developing markets such as China and Eastern Europe.

In 2005, P & G acquired Gillette, a giant shaving giant, and Gillette investor Warren Buffett called it a "dream contract". The synergistic effect is obvious - the merger will again be Buffett's word, "the world's largest consumer goods company." P & G 's CEO, Lavli also emphasized that the similar culture of both companies is an advantage of the merger. But two years later, the Wall Street Journal issued a front page report describing the cultural issues Laverly encountered in integrating these organizations. The persistent difference in values ​​and tasks is not the cause of friction. Instead, the two groups have different communication modes and deliberations. For example, Gillette has a "culture of memorandum", but P & G's "primates" tend to face meetings. Gillette made a quick decision and P & G 's decision was more careful.

The acquisition of Gillette by Proctor & Gamble is not accompanied by any difficulties that can be caused by normal conflicts or acquisitions. The process of consolidation is described in Rosabeth Moss Kanter and Matthew Bird's "Pastor and Gamble (B) in the 21st Century: Welcome to Gillette". On the contrary, P & G clearly stated to Gillette that he was willing to respond flexibly to Gillette 's needs in order to make the transition smooth and peaceful. At the individual level, A. G. Lafley, Chairman and CEO of Procter & Gamble, hopes to gain the trust of Gillette Chairman and CEO Jim Kiltz. Lavli has personalities that emphasize familiarity and openness as well as extroverted hints. To gain his trust, Lavli did not involve bankers and lawyers in the negotiations, and it marked his goal is honest and quilt and transparent. Lafely understood that honesty is the key to successful negotiations and thought, "There is no reason not to put the card on the table" (Kanter and Bird, 1)