P&G seeks EU consent for Gillette bid
European Commission approval for its $57 billion take over bid for
Gillette. Although the company still has several hurdles to
overcome, final approval will make the company the largest consumer
goods maker in the world, reports Simon Pitman.
The move is the latest in a series of bureaucratic hurdled that have to be cleared to enable the deal to go ahead. P&G says that despite facing competition authorities on both sides of the Atlantic and a subpoena issued in Gillette's home state, Illinois, the company still believes that the deal is on track to be finalised this Autumn.
If approval is granted then some of the world's leading cosmetic brands, including Gillette razors and personal care lines, combined with P&G personal care lines such as Oil of Ulay, Head & Shoulders and Oral-B and other household names such as Tide and Pringles, will push current leading households goods maker Unilever into the number two slot.
P&G confirmed that the details of the bid were submitted to the Commission at the end of last week, which gives the regulators four weeks to decide if it wants to give its approval or to launch a four-month investigation into the deal to see if strict competition laws might be broken.
Industry experts believe that due to the size of the potential merger and its gravity on the consumer market in Europe, the chances of a formal investigation into the deal are high.
Although such an investigation might make P&G's plans to complete the merger by Autumn look a little optimistic, it is widely believed that an investigation is unlikely to find reason to refuse the deal because the two company's have only a limited overlap in their business areas.
In recent weeks both an on-going subpoena by Illinois-based secretary of state William Galvin and the postponement of its shareholders meetings to vote of the deal from June to July, have all given many in the industry reason to believe that the deal might not be as straight forward as P&G first believed.
William Galvin could still prove to be a thorn in the side of P&G as he continues to push through with his subpoena that questions proposed job losses and the $165 million Gillette CEO Jim Kilts stands to make on the deal.
