Men are from Mars and women are from Venus. Despite the indomitable challenges, Procter & Gamble (P&G) decided that it would be better off servicing the aspirations of both, with its acquisition of Gillette on October 1, 2001, for a mammoth $57 billion. 
In the process, P&G seems to be indeed baying for UniLever’s blood in the battle for absolute dominance in the FMCG sector now.
The strategy is pretty straightforward; the future belongs to the company that has the maximum number of powerful brands in its portfolio. As companies shy away from in-house development of nouveau brands and products; acquisitions are the only logical route. While P&G of yore had 16 ‘billion dollar’ brands, Gillette added five more, resulting in a portfolio of 21 ‘billion dollar’ brands. Gillette’s brands include Mach3, Braun, Duracell and Oral-B.
P&G, on the other hand, prides itself with brands like Ariel, Olay, Head & Shoulders and Tide. The acquisition is in line with P&G’s recent acquisitions of Clairol, a premium shampoo brand in 2001 and leading hair care brand, Wella, in 2003.
“This combination of two best-in-class consumer products companies, at a time when they are both operating from a position of strength, is a unique opportunity,” said A.G. Lafley, Chairman and Chief Executive of P&G. This acquisition also emphasised P&G’s desire towards being a lifestyle brand from just a consumer products company. The combined entity posted revenues of $17.25 billion (an increase of 21% year on year) for the quarter ending March 2006, compared to Unilever’s $12.33 billion. The deal would take time to unleash its full potential, as P&G attempts to integrate Gillette’s brands. But, perhaps it’s the “best a man can get” – for P&G!
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Source : IIPM Editorial, 2006
In the process, P&G seems to be indeed baying for UniLever’s blood in the battle for absolute dominance in the FMCG sector now.The strategy is pretty straightforward; the future belongs to the company that has the maximum number of powerful brands in its portfolio. As companies shy away from in-house development of nouveau brands and products; acquisitions are the only logical route. While P&G of yore had 16 ‘billion dollar’ brands, Gillette added five more, resulting in a portfolio of 21 ‘billion dollar’ brands. Gillette’s brands include Mach3, Braun, Duracell and Oral-B.
P&G, on the other hand, prides itself with brands like Ariel, Olay, Head & Shoulders and Tide. The acquisition is in line with P&G’s recent acquisitions of Clairol, a premium shampoo brand in 2001 and leading hair care brand, Wella, in 2003.“This combination of two best-in-class consumer products companies, at a time when they are both operating from a position of strength, is a unique opportunity,” said A.G. Lafley, Chairman and Chief Executive of P&G. This acquisition also emphasised P&G’s desire towards being a lifestyle brand from just a consumer products company. The combined entity posted revenues of $17.25 billion (an increase of 21% year on year) for the quarter ending March 2006, compared to Unilever’s $12.33 billion. The deal would take time to unleash its full potential, as P&G attempts to integrate Gillette’s brands. But, perhaps it’s the “best a man can get” – for P&G!
For Complete IIPM Article, Click here
Source : IIPM Editorial, 2006
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