Two to Tango

P&G's recent announcement of acquiring 100% stake in Gillette may benefit the two firms, as they both have a fair deal of presence in the Indian market, with their respective product categories. Presently P&G is operating in India through its two companies, Procter & Gamble Hygiene and Healthcare Limited, which is the listed and Procter & Gamble Home Products, which is unlisted. The combined companies have a turnover of Rs. 1,500 cr. They have eight major brands which are operating their business in India. On the other hand, though the Rs. 900 cr Indian blade market is dominated by the so called Malhotra's with their local brands like Topaz, Laser SuperMax to name a few, but the important point here is that Gillette, with a market share of 35% is doing pretty well. Gillette India has closed the year 2004 with an annual sale of Rs. 406.31 cr. Its sales figures also increased considerably from the last year. According to Zubair Ahmad, "Gillette India MD, there has been an increase in the Gillette's grooming business up by 14%, its Duracell battery business by 41% and its Oral-B toothbrushes by 8%". Its newly launched Mach3 Turbo is also doing quite well. This indicates that Gillette has got a good feel of the Indian markets and have products for every category of the society.

P&G's sales are estimated to be around Rs. 1,500 cr and Gillette's Rs. 425 cr of which the shaving and grooming products account for almost 80% of its sales in India. The combined P&G-Gillette Empire is estimated to be worthy of around Rs. 1,925 cr in the Indian FMCG Market. According to Saugata Gupta, head of marketing, Mario industries, "the deal will help both the firms to further consolidate their products as Gillette penetration levels are mostly in urban settlements and cities whereas P&G's target segments are middle and average middle class peoples." This deal will give P&G the edge against HLL. The Indian heads of both the firms, Shantanu Khosla of P&G and Zubair Ahmad of Gillette, declined to comment on the deal as they were also not sure of their business in India. The picture is still not clear whether Gillette will merge into a single company or will it maintain its separate identity. The matter gets even more complicated as there is confusion across the hierarchy because of the announcement of cut-off of almost 6,000 employees all across the world. According to a senior executive of Gillette, "times are uncertain for as many as 500 people at Gillette India. There is a growing anxiety among the employees across the different levels of hierarchy about their fate because they are not sure of sustaining their jobs or not".