Business Case Studies, Strategy Case Study, Mergers, Acquisitions, Alliances and Synergies

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Mergers, Acquisitions, Alliances and Synergies Case Study

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Case Title:

Gillette's Merger with P&G : The Strategic Fit?

Publication Year : 2005

Authors: Nusrath Jahan Maldar, Srinath Manda

Industry: Fast Moving Consumer Goods and Consumer Products

Region: USA

Case Code: MAA0041

Teaching Note: Available

Structured Assignment: Available


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Abstract:
Procter & Gamble (P&G), the number one US consumer goods company, and Gillette, the world's largest manufacturer of shaving products, announced the merger of their operations in January 2005. The $57 billion merger was the ninth largest in the US corporate history. Post-merger, the new company would dethrone Unilever as the world's largest producer of consumer goods and is expected to have bargaining power rivaling that of global retailers like Wal-Mart and Carrefour. The merger, scheduled to be completed in late 2005, is expected to reap cost synergies of up to $22 billion for the new company. But the problems encountered by Daimler-Chrysler and Hewlett Packard-Compaq's mergers showed that size could be a potential hindrance to the success of a merger.

Pedagogical Objectives:

  • To discuss the potential synergies that P&G can gain from the merger
  • To analyse the problems it is likely to face in the course of the merger's successful execution.

Keywords :  Procter & Gamble Company (P&G);Mergers,Acquisitions,Alliances Case Study; Gillette Company (Gillette); Consumer product companies; Consumer goods industry; Merger of equals; World’s largest FMCG (Fast Moving Consumer Goods) company; Cost synergies; Billion dollar brands; Wal-Mart effect; Strategic fit; Industry consolidation; Risk of execution failure; Cross-cultural competence; Colgate Palmolive; Unilever

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Case Study :
   INR 200 = USD ($)

Structured Assignment:
   INR 150 = USD ($)

Teaching Note :
   INR 400 = USD ($)
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