Mergers and Acquisitions: Proctor and Gamble, and Wella Ag
In regards to acquisitions, it is important to distinguish between mergers and acquisitions. In a merger, two companies come together and create a new entity. In an acquisition, one company buys another one and manages it consistent with the acquirer’s needs. An acquisition that involves integration has greater staffing implications than one that involves separation (Rizvi, 2008). A combining of companies is a major change. Mergers and acquisitions represent the end of the gamut of options companies have in combining with each other. It is the mergers and acquisitions that are the combinations that have the greatest implications for size of investment, control, integration requirements, pains of separation, and people management issues (Doz and Hamel, 1998). This paper will provide a brief history of the two companies, as well as a financial analysis and a summary to conclude whether this merger was a success or a failure.
Proctor & Gamble is a fortune 500 company. William Procter, a candlemaker, founded the company and James Gamble a soap maker, formed the company known as Procter & Gamble (P & G) in 1837. The two men emigrated from England and Ireland and settled early in Cincinnati. They might never have met had they not married sisters: Olivia and Elisabeth Norris. (Britannica Encyclopedia, 2007) The business decision was made by their father-in-law to make the two men business partners. The company prospered during the 19th century. In 1859 sales reached one million dollars. By this point, approximately eighty employees worked for Proctor & Gamble. During the Civil War the company won contracts to supply the Army with soap and candles. (www.pg.com) The products of the company were in such demand that it increased the profit of Proctor & Gamble.
In the 1880s, Proctor & Gamble began to market a new product, an inexpensive soap that floats in water. The company called the soap Ivory. Ivory is the only soap that floats in water. The Ivory soap was made by
Proctor & Gamble is a fortune 500 company. William Procter, a candlemaker, founded the company and James Gamble a soap maker, formed the company known as Procter & Gamble (P & G) in 1837. The two men emigrated from England and Ireland and settled early in Cincinnati. They might never have met had they not married sisters: Olivia and Elisabeth Norris. (Britannica Encyclopedia, 2007) The business decision was made by their father-in-law to make the two men business partners. The company prospered during the 19th century. In 1859 sales reached one million dollars. By this point, approximately eighty employees worked for Proctor & Gamble. During the Civil War the company won contracts to supply the Army with soap and candles. (www.pg.com) The products of the company were in such demand that it increased the profit of Proctor & Gamble.
In the 1880s, Proctor & Gamble began to market a new product, an inexpensive soap that floats in water. The company called the soap Ivory. Ivory is the only soap that floats in water. The Ivory soap was made by
References: Bhatnager, P. (March 18, 2003). P&G has a good hair day. Retrieved June 9, 2008 from, http://cnnmoney.printthis.clickability.com Capasso, A and Meglio,R(2007) Doz, Y. L., and Hamel, G. (1998). “Alliance advantage: The art of creating value through partnering”, Harvard Business School Press, Boston, MA. Internal Revenue Service, (nd) retrieved electronically on June 10, 2008 from www.irs.gov Procter & Gamble Procter & Gamble. (2004-2005; 2007). P&G Annual Report. www.pg.com/investors/. Retrieved June 7, 2008. Rizvi, Yasmeen (2008) Picking the flowers; Acquisition strategy as a tool for survival and growth. Washington Post.com, (nd) The Pros and Cons of Partnerships retrieved electronically on June 11, 2008.