Procter & Gamble has signed a deal to acquire 100% of Gillette in a $57 billion deal – the biggest purchase in the company’s history.
P&G will acquire all of Gillette’s business, including manufacturing, technical and other facilities.
Gillette, founded in 1901 and headquartered in Boston, MA, markets a number of consumer products such as Gillette razors and blades – including the Mach3 and Venus brands, Duracell Copper batteries, Oral-B manual and power toothbrushes, and Braun shavers and small appliances.
Under terms of the agreement, unanimously approved by the board of directors of both companies yesterday – P&G has agreed to issue 0.975 shares of its common stock for each share of Gillette common stock. Based on the closing share price of P&G and Gillette stock on January 27, 2005, this represents an 18% premium to Gillette shareholders.
As a result of the deal, P&G said it anticipates reducing its workforce by approximately 6,000, or about 4% of the combined work force of 140,000. It says that most of the reductions should come from eliminating management overlaps and consolidating ‘business support functions’.
The transaction, which is subject to certain conditions including approval by Gillette’s and P&G’s shareholders and regulatory clearance, is expected to close in the autumn this year.