The Telegraph
Since 1st March, 1999
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Gillette edge for P&G arms

Mumbai, Jan. 28: Procter & Gamble's Indian arms will add more than a dash of male-grooming sheen to its mainstay businesses of healthcare and women's hygiene.

P&G Home Products and P&G Hygiene and Health Care Ltd, the two companies of P&G in India, will now have their iconic products like Vicks backed up by Gillette's portfolio of shaving products and Duracell batteries.

P&G Home Products, the unlisted arm of the Cincinnati-based P&G, sells the widely popular Pantene shampoo, besides the Ariel, Tide brands of detergent powder here. Some of these are even shipped to key markets abroad.

'Gillette's acquisition will expand the business horizon of P&G. It will extend its business to men's grooming products and will be highly beneficial,' Dhiraj Sachdev, portfolio manager at ASK Raymond James, said.

The immediate concern, however, is around an open offer that P&G will have to make to shareholders of Gillette India, of which the US parent owns 52 per cent. The promoters, including the Poddar family, hold 88.76 per cent, leaving little with small investors to be mopped up. Some observers do not even track the two stocks because of the low public shareholding in the two firms.

Analysts expect the offer, necessitated by the change of control at Gillette, to be priced at the higher of the two figures ' the average price of last two weeks or the past six months.

News of the deal fired up both shares on Dalal Street today. P&G jumped to Rs 612.55 from of Rs 586 on Thursday; Gillette India shares jumped to Rs 674.65 from Rs 629.90.

Shantanu Khosla, country manager of P&G India, said it was too early to predict the impact of Gillette's acquisition on his group firms.

'Details of that for each country will be known later,' he added. The picture is hazy also because of P&G's fully-owned subsidiary in India.

P&G Hygiene, the listed arm, is driven by the widely used Vicks and Whisper brands. It is unlikely to own Gillette's range; at best, it may manufacture or market them.

Gillette India, on the other hand, clawed its way to the black in 2003 after revamps in 2001 and 2002. In recent years, the company hived off its battery (Duracell) plant at Manesar. At the same time, its US parent shovelled some cash, which went into repaying debts.

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