>> Case Study
Read Assessing Procter and Gamble's Acquisition of Gillette.
Write a 5 page paper (1500 or more words) in APA format in response to the questions listed below:
- What kind of M&A event is the story describing? (Is a horizontal/vertical merger, consolidation, or other kind of event?) How do you know? Be sure to justify your response.
- Part of the M&A event required both companies to divest assets. Why would a government regulator force them to divest certain assets as to approve an M&A event? (Hint: This requires TWO chapters.)
- Given forced divestiture, why do you think the M&A event occurred? What did the companies, boards, and shareholders gain by selling off segments and committing to the M&A event? What was in it for them?
- After reading the story, do you think people got what they wanted out of the M&A event? (Consider management, shareholders, and other people in the story!)
- What is your opinion of the survivor and can you propose measures before and after the M&A event as to gauge whether the M&A effort was worthwhile?
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The acquisition of Proctor and Gamble of Gillette Company is a unique opportunity for the P&G.
According to the books, mergers are called those events where there are two and more companies join together to make a single company to operate in the market. The merger can take a new name of the company or the old name as well. The consumed company is referred as target and the purchasing company is called as survivor.
The case of ICMR discusses the merger of these two companies as consolidation.
Consolidation takes place between the two or more companies and there is no survivor. The philosophy behind this merger is to reduce the inefficiency by consolidating two or more companies’ resources with a new name or operation and staff and organizational goals as well. The process involved divesting all the inappropriate structures and resources to make a new effective process for proper utilization of resources to gain productivity. The two giant companies have come along with the view of beating the strongest competitor in the market and that is Unilever Company. The survivor and the target both companies function with each other and there is no one survivor and they both work together with a new name.
The consolidation of these companies becomes possible because of the recent trends of consolidation taking place in consumer goods industry.