Procter & Gamble buys Gillette

Procter & Gamble has purchased Gillette, the parent company of Oral-B, in exchange for US$54 billion in stock. The merger will create the world's biggest consumer products group with a market capitalisation of US$200 billion.

The merger is unlikely to affect Oral-B's Australian operations for the foreseeable future as Proctor & Gamble has no presence in the local dental market.

The dental businesses of Gillette and P&G have a number of synergies. Oral-B's strengths lie in the power and manual toothbrush arenas. A suite of innovative products including the Hummingbird flosser and Brush-ups fingertip tooth cleaners have also recently been released. These complement a full range of consumer and professional oral care products.

Conversely, Procter & Gamble's Crest range of toothpaste has driven its business in the US where it holds a significant market share. Crest is not marketed in Australia as its formulation contains 1100 parts per million fluoride. Australian regulations restrict fluoride content in OTC toothpastes to 1000ppm.

One of Crest's most successful product launches in recent years has been the incredibly successful Crest White Strips tooth whitening strips. The recent acquisition by Oral-B of Rembrandt saw the release at the Adelaide Congress of Rembrandt Whitening Strips. The release of the Rembrandt range is Oral-B's first entrée into the growing OTC whitening market.

Outside of dentistry, P&G has strengths in women's personal care with brands such as Olay, Always, Tampax, Cover Girl and Max Factor. Gillette has dominated the men's grooming category with the entire lineup of Gillette and Braun products and also owns Duracell batteries.