Procter & Gamble buys Gillette for $ 57 billion

Procter & Gamble, one of the largest manufacturers of detergents and personal hygiene goods, buys Gillette for $ 57 billion. As a result of the merger, the largest company of the consumer sector in the world is formed.

Gillette, in addition to the razor of the same name, produces Duracell batteries, Oral-B toothpaste and household electrical appliances under the Braun brand.

By agreement, signed by the Boards of Directors of both companies, P&G will release 0.975 of its ordinary promotion in exchange for each Gillette campaign. Additionally, P&G and its subsidiaries plan to redeem P&G shares in the amount of $ 22 billion in the next 12-18 months. Based on the closing prices of shares on January 27, the transaction involves an 18 percent prize for the cost of Gillette shares. The cost of acquisition on this basis will be about $ 57 billion.

The transaction is subject to approval by shareholders and regulatory authorities, K2kapital notes. It is assumed that the transaction will be completed in the fall of 2005.

“This deal will lead to the formation of the largest company of the consumer sector in the world,” commented on the deal Warren Buffett, the head of the Berkshire Heathaway holding company, which is the largest shareholder of Gillette. "This is a launch transaction. If we talk about numbers, I am going to buy a sufficient number of shares so that when the transaction is completed, we would have 100 million P&G shares."

The united company will have annual income in the amount of more than $ 60 billion, which will allow it to bypass the Anglo-Council company Unilever and take first place in the global industry of consumer goods.