New Delhi: Lets not lose market share even if it means sacrificing margins in the short term. Long Procter and Gambles battle cry, in the last few years it had increasingly become an intrinsic part of arch-rival Unilevers strategy as well. Hardly surprising, as Paul Polman who became Unilever CEO in 2009 had spent 27 years at P&G.
With mergers and acquisitions picking up globally, it was only a matter of time before someone started speculating about these two behemoths. On June 2, a Daily Mail story did just that. The Mail said P&G was lining up a $62 billion bid for rival Unilever. Both companies have maintained a steadfast silence. But the question still remains: Is it a good move, or one that could destroy both companies? First off, the merger would be a step back for both companies.
In the last decade theyve both become leaner organisations. While both may be consumer goods companies P&G focusses more on its health and wellness business and Unilever is big on food. To merge and acquire the very same businesses they sold in the last decade does not make for good business. Then there are areas where the product overlap is so strong, particularly in the detergent segment, that it is almost certain to fall afoul of competition laws. Regulators in Europe and America have been particularly careful in approving mergers that are likely to reduce competition. Both companies will also struggle when it comes to human resources. P&G
12:14 PM, Jun 24, 2011