Gillette deal comes under fire again from US senator
Massachusetts Secretary of State William Galvin, the senator is
again knocking at Gillette's door, this time trying to contend that
the razors and personal care giant did not supply sufficient
evidence for the previous case, writes Simon Pitman.
Yesterday AP new agency reported that the Massachusetts securities regulators have issued another subpoena to four Gillette executives after the company said that emailed information demanded by Galvin may have been deleted.
The latest subpoena says that the four executives are expected to give evidence under oath in the Massachusetts law courts next week. It names the executives as chief financial officer Charles Cramb, vice-chairman Edward DeGraan, human resources manager Edward Guillet and manager of strategic and business development manager Peter Klein.
Galvin has been locked in a tight battle law courts battle ever since Gillette announced that is would be acquired by cosmetics and personal giant Proctor & Gamble in a $57 million deal, in January of this year.
The final agreement is not due to be made until the end of this year, but in the meantime Senator Galvin has been attempting to throw a spanner in the works at every corner, ostensibly to prevent the threatened loss of jobs and business at Gillette's Massachusetts headquarters in Boston as well as a number of manufacturing facilities.
Both Gillette and P&G have made no secret that the deal will lead to big changes to employment structure, with synergies leading to significant job cuts. As Gillette's headquarter are in Boston it is expected that this will be one of the areas where losses will hit hardest.
Gillette estimates that its workforce will shrink by 4 per cent, representing approximately 6,000 of its 140,000 combined global workforce. In contrast to the job losses it is said that P&G chairman and CEO James Kilts will earn $153 million if the deal goes through.
Galvin is fighting the conditions of the merger because he believes that it could lead to the termination of thousands of work contracts for Gillette's Boston-based employees. In contrast to the job losses it is beleived that P&G chairman and CEO James Kilts will earn $153 million if the deal goes through.
As well as highlighting the job losses, Galvin has also repeatedly said that in his opinion the terms of the deal undervalue Gillette by an estimated $15 million.
"The only way we can get to the bottom of this deal is to get the individuals who were intimately involved in the negotiation on the record about the transaction," Galvin told AP.
Speaking at a shareholders meeting in New York yesterday, Kilts called Gillette's results for 2004 'an outstanding year', pointing out that it was the company's second year of double digit growth.
Kilts also commented on the proposed merger with P&G, although he made no reference to the current court battle, saying that "it would create the greatest potential benefits for Gillette and shareholders and would offer significantly increased opportunities for the vast majority of employees.
"Our board of directors and our management consider this an historic opportunity for our company, our shareholders and our employees, and we recommend that you vote in favor of the proposed merger," he added.
