P&G, Gillette deal still on track despite misgivings
acquisition of Gillette after a subpoena issued against the deal
received a serious blow in the law courts and the company confirmed
the date for its shareholder meeting to approve the deal,
reports Simon Pitman.
P&G announced today that it was postponing the shareholder meeting from June 13 to July 12 in order to allow sufficient time for shareholders to fully review the proposed acquisition.
But the global cosmetics and personal care giant said that the move would in no way impact the deal and that the complete merger was still on track for fall of this year.
Likewise, Gillette spokesman Eric Kraus said the move was strictly procedural in order to comply with regulatory procedures and that all the planning and work being carried out for the merger remained on schedule.
Meanwhile, a blow has been dealt to Secretary of state William Galvin, who is currently in the midst of fighting a second subpoena against the merger. Galvin claims the move threatens jobs in the Boston and Illinois area and that the deal is seriously undervaluing Gillette.
Galvin says he has an obligation to both shareholders and local employees to ensure that the deal will be fairly conducted. This decision has seen him locked in a tight battle with Gillette ever since the deal was announced back in January of this year.
At the end of last week a judge refused to let the senator scour all of Gillette Company's deleted emails relating to the acquisition, which means that potential evidence might be lost.
However, Judge Allan van Gestel did order Gillette to reveal copies of emails between executives and investment bankers involved in brokering the deal.
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.
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 billion.
"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 press last month.
