Proctor and Gamble 2005 Annual Report Download - page 12
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Please find page 12 of the 2005 Proctor and Gamble annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.OnJuly12,2005,P&GandGilletteshareholdersoverwhelminglyapprovedthe
combinationofthetwocompanies,withmorethan96%ofvotingshareholders
infavoroftheacquisition.TheGilletteintegrationteamisjointlyledbyP&G
ChiefFinancialOfficerClaytDaleyandGilletteCEOJimKilts.Inthisdiscussion,
P&GCEOA.G.Lafleyaddressesquestionsabouttheplannedintegration.
“Mega-mergers”oftenfail,evenwhenthecompaniesare
inthesameindustry.Howwillthisacquisitionbedifferent?
Thereareanumberofimportantdifferencesthatmakeus
confidentthiscombinationwillnotjustwork,butthrive.
Thefirstisthehealthofourbusinesses.Often,when
companiesareacquired,oneofthecompaniesisstruggling.
That’snotthecasehere.BothGilletteandP&Garedelivering
strongtop-andbottom-linegrowth.We’recombining
Gillette’sandP&G’shealthybrandfranchisesandcore
strengths.And,we’recomingtogetheratatimewhenthere
areabundantopportunitiesforevenmoregrowth.Webelieve
wecanandwillgrowfastertogetherthaneithercompany
couldgrowalone.
AnotherkeydifferenceistheuniqueflexibilityofP&G’s
organizationstructure.P&G’sGlobalBusinessUnit(GBU),
MarketDevelopmentOrganization(MDO),andGlobal
BusinessServices(GBS)structuregivesustheabilityto
integratenewbusinesseswhilecontinuingtobuild
existingbusinesses.
TheIams,Clairol,andWellaacquisitionsdemonstratedthis
capability.Ourmarketdevelopmentorganizationshavetaken
Clairol’sHerbalEssencesbrandglobalwhileconcurrently
buildingPantenetorecordglobalmarketshareandturning
Head&Shouldersintooneofourfastest-growingbillion-
dollarbrands.Likewise,P&G’sGlobalBusinessServices
organizationhasbeenintegratingback-officesupportforthe
newacquisitionswhilealsoraisingservicelevelsandlowering
costsforP&G’sbasebusiness.Nootherconsumerproducts
companyhascreatedsimilarorganizationcapabilities.
Gillette’sbusinesseswilltakefulladvantageofP&G’sGBU,
MDO,andGBSorganizationstructure.
Doyouremainconfidentthatyoucanachievethecostand
revenuesynergygoals?Yes.We’veidentifiedmorethana
billiondollarsincostsynergyopportunities.Integrationteams
aredevelopingplanstodeliverthem.Wewilleliminate
administrativeoverlapbyintegratingGillette’sandP&G’s
corporatestaffs.WewilldelivercriticalsupportthroughP&G’s
GlobalBusinessServicesorganization,leveragingscaleto
deliverbest-in-classcostsnotavailabletoGillettetoday.We
seesignificantsynergyopportunitiesinpurchasing,
manufacturing,logistics,marketing,andretailselling.
10
IntegratingGillette
$10.5billion
2004saleswith$1.7billionnetincome
Duracellincreaseditsleading
globalmarketshareofalkaline
batteriesto40%in2004.
BladesandRazors
hasmorethana
70%globalmarket
share–nearlyfive
timeshigher
thanthenearest
competitor.
Oral-Bhasastrongportfolioin
manual,battery,andrechargeable
toothbrushesandistheglobal
leaderwitha36%shareofmarket.
Braunisthe
#1globalbrand
inthepremium
electricshaver
market.