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Gillette buys Duracell
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September 12, 1996: 11:22 a.m. ET
Gillette agrees to snap up Duracell for more than $7 billion in stock
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NEW YORK (CNNfn) -- Gillette Co. on Thursday agreed to buy Duracell International Inc. for $7 billion in stock, a deal that moves Gillette closer to becoming a diversified consumer products company.
Gillette, bidding to strengthen its line of household products and expand beyond its highly-successful base in shaving products, will pay $58.85 a share, or 0.904 shares of Gillette for each Duracell share. Duracell shares opened Thursday at $49.125 each on the New York Stock Exchange, while Gillette shares were at $65.125 each.
Gillette Chairman and Chief Executive Alfred Zeien has long stated his interest in broadening the business with new lines of consumer products. As the world's leading maker of alkaline batteries, Duracell would add $2.3 billion in annual sales to Gillette and bulk up a stable of products that already includes Sensor razors, Parker Pens, Braun shavers and Oral-B products.
"This transaction represents an excellent strategic fit for Gillette," Zeien said. "Duracell's global consumer business fits perfectly with Gillette's mission to achieve or enhance clear leadership worldwide in the existing or new core product categories in which we choose to compete."
The agreement now awaits shareholder and regulatory approval later this year.
Duracell's largest shareholder is the Wall Street buyout firm Kohlberg Kravis Roberts & Co., which bought the battery maker from Kraft Inc. for $1.8 billion in 1988. KKR later took Duracell public, but the company has since failed to become a home run for shareholders.
Analysts said Duracell has been a financial disappointment of late. Sluggish sales in Europe and increased competition in the U.S. has cut into profit margins. Speculation is that a merger could help Duracell regain momentum.
"With the resources of Gillette supporting us," said Charles R. Perrin, chairman and chief executive officer of Duracell. "We anticipate expanding our worldwide leadership in the battery business at a faster rate, due to the benefit of the significant presence of Gillette in markets where Duracell is not as strongly represented."
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Duracell home page
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