Gillette

Global Gillette, formerly The Gillette Company, is the world's #1 maker of shaving supplies, the firm is best known for its razors and blades, but it's also a leading battery (Duracell) maker. Gillette also makes Braun electric shavers. In October 2005 the Procter & Gamble Company (P&G) bought 100% of Gillette for about $57 billion in stock. Its Braun- and Oral-B-branded oral care products are now part of P&G's brand portfolio. It sold its Right Guard, Soft & Dri, and Dry Idea brands to Henkel's Dial for approximately $420 million USD. Gillette operates 64 manufacturing facilities in 14 countries, R & D centers are located in Germany, United Kingdom and the United States and its products are sold in more than 200 countries and territories, with more than 60 percent of sales occurring outside the United States. The company is currently headed by its President and CEO, Mark M. Leckie, VP for Corporate Communications, Eric A. Kraus, Corporate Affairs and Sports Marketing and Sports Properties Director Mike Norton. Gillette's product categories include razors and blades (Mach3, Venus, Sensor), batteries (Duracel Copper Top), oral care (Oral B full range manual and power brushes), appliances ( Braun shavers, Silk Epil, and other Braun small appliances) and skin care (Gillette personal line).

The Gillette Company was founded by King Camp Gillette in 1901. King had found that the edge of his straight razor had dulled often and came up with an idea for an entirely new kind of razor with a disposable blade. Gillette envisioned an inexpensive, double-edged blade that could be clamped over a handle, used until it was dull and discarded. Gillette spent over six years perfecting his safety razor and in 1901 partnered with William Nickerson and Massachusetts Institute of Technology educated machinist who developed a production process that made Gillette's idea a reality. After the completion of the first safety razor prototype Gillette formed the American Safety Razor Company to raise $5,000 for the first production. Gillette became president of the company and production began in 1903.

The first year sales of the company was, 51 razors sets at $5 each and 168 blades at $1 for 20 pieces. In 1904, Gillette received that patent on the safety razor and sales increase to 123,000 blades that year. The following year the company purchased a six storey building in Boston and by 1906 it paid its first cash dividend. The company experienced steady growth in the years before World War I through their main advertising avenue - print, which emphasized that the razor shaving could be done under any conditions without irritation and cutting. It was also during this time that the company started expanding abroad, opening a sales office in London and by 1905, King Gillette had established manufacturing plants in Paris, Montreal, Berlin, and England with satellite offices in France and Germany. At the end of 1923 the international business of Gillette accounted for 30% of total annual sales. In 1910 King Gillette decided to sell a substantial portion of his controlling share of the company to the company's major investor, John Joyce. Gillette had succeeded in fighting off advances for control of the company from Joyce in the past, but this time he took approximately $900,000 and bowed out. Gillette retained the title of president but no longer played an active role in company management. Joyce was made vice-president, a position he used to manage day-to-day operations. When Joyce died in 1916, his longtime friend, Edward Aldred, a New York investment banker, bought out the Gillette shares left to Joyce's estate and took control of the company. Aldred remained on Joyce's management team. In World War I the U.S. government ordered 3.5 million razors and 36 million blades to supply all its troops. In order to meet military supply schedules, shifts worked around the clock and Gillette hired over 500 new employees. Gillette thus introduced a huge pool of potential customers to the still-new idea of self-shaving with a safety razor. After the war, ex-servicemen needed blades to fit the razors they had been issued in the service.

By 1930, Gillette faced its first major setback. Auto Strop Safety Razor Company, owned by Henry J. Gaisman, filed suit for patent infringement after Gillette produced a new blade using a continuous-strip process similar to one originally presented to Gillette by Gaisman. Gillette resolved the suit by merging with Auto Strop, only to face another problem. When Gaisman checked the company's financial records, he found that Gillette had over-reported its earnings for the past five years by about $3 million. Confidence in Gillette fell, as did its stock. From a high of $125 early in 1929, the stock bottomed out after the disclosure, at $18. The crisis led to management reorganization. King Gillette resigned as nominal president, and died 14 months later at age 77. Gaisman became the new chairman of Gillette and Gerard B. Lambert, son of the founder of the Lambert Pharmacal Company--makers of Listerine--and a former manager there, came out of retirement to become president of Gillette.

Proctor and Gamble

Proctor and Gamble was established in 1837 as a small soap and candle company in Cincinnati, Ohio. Today Proctor and Gamble is the world's largest consumer goods product company that markets more than 300 brands in 160 countries and employs 135,000 employees worldwide. P&G's business is divided into three global units: beauty and health; household care; and Gillette.

P & G is the leader in global development, manufacturing and marketing of the worlds most well known brands including Tide, Ariel, Whisper, Pantene, Dawn, Bounty, Mach 3, Crest, Oral B, Duracell, Olay, Wella, and Braun. The company's total expenditures in 2005 was more the $2 billion USD and currently has 28 R & D centers in ten countries in four continents.

The company is headquartered in Cincinnati, Ohio, and is headed by A.G. Lafley, Chairman of the Board, President and Chief Executive Officer. The company is listed on the NY stock exchange as PG with a current market price of $63.16. It is indexed under Household and Personal Products Industry under the Consumer Goods sector.

Integrating Gillette

In July 12, 2005, P & G and Gillette shareholders approved the combination of the two companies with more than 96% of voting shareholders in favor of the acquisition. The acquisition was led by P & G CFO Clayt Daley and Gillette CEO Jim Kilts.

Under the terms of the acquisition agreement approved by the board of directors of both companies on January 27, 2005 P & G agreed to issue 0.975 shares of its common stock for each share of Gillette common stock. P &