History of a merge

In November 2004, Jim Kilts confabed A. G. Lafley at P&Gs Cincinnati headquarters. Kilts, who had been death chair and CEO of Gillette for 4 years, was seeking a buyer of the global Boston-based company. Lafley, who had been Chairman and CEO of P&G for over 4 years, was out of the office and had to call him back, unaware of what Kilts was or so to propose. Lafley questioned Kilts on three topics. First, what was Gillettes price? Kilts said he wanted a fair offer.Not $60 per share, but not $50. Jim, Lafley responded, I can do the math. Are you thinking Gillette holdings into P&G stock and options and hold them for an agree utmost of time. He would also consider staying with P&G for a year after official merger. Finally, Lafley asked about the description of the new gardening he helped give voice during his turnaround of P&G. The P&G culture is more collaborative, open, and competitive than you may know it to be, he said.Three days later, Lafley met Kiltss personal office in Rye, New York. They spoke the entire afternoon and agreed to expand negotiations to include select senior managers. At one points , Kilts asked Lafley why he didnt pull in any bankers or lawyers. Lafley said they wont necessary. Kilts, Gillette CFO Chuck Cramb, and vice chairman Ed DeGRaan met with Lafley and his CFO, Clayt Daley, to work out the merger teams. Culture and tint were major issues for Lafley. we were experienceing for a collaborative culture, he said. In fact, I decided that we were going to be collaborative in the negotiations. We had a friendly issue here, and there was no reason not to charter the cards on the table. Lafley called someone that both he and Kilts respected, Rajat Gupta, former managing director of McKinsey, who urged Kilts to give Lafley an open look at potential cost synergies and a glisten at Gillettes planned technological innovations. Kilts agreed.But stick with December 2005, they halted negotiations, realizing that they couldnt strike an agr eement in the first place the upcoming analyst meetings and holidays. Lafley called Kilts back after Christmas. From a strategy standpoint, Lafley considered the acquisition a no-brainer. Both companies would detect the scale needed to drive the global intricacy of its products P&Gs developing merchandise size was five times Gillettes $11 billion in annual sales versus $2. 2 billion.Together, the combined entity would include 21 billion horse brands, 16 from P&G and 5 from Gillette. Gillettes brands further migrated P&Gs products portfolio toward high-margin beauty, health and personal care categories. The merger would fortify retail customer relationship, especially through the combined companionship of male consumers, from Gillette, and female buyers, from P&G. And they could leverage various(prenominal) business strengths, such as Gillettes trade-up practices and P&Gs go-to-market expertise, to improve growth.