Gillette To Buy Duracell for $7 Billion
NEW YORK (AP) _ Gillette Co. announced today it will buy Duracell International Inc. for about $7 billion, bringing the consumer products company into the battery business.
``This transaction represents an excellent strategic fit for Gillette,″ Alfred M. Zeien, Gillette’s chairman and chief executive, said in a statement announcing the deal.
Duracell’s copper-top batteries appear on many of the same store shelves as Gillette’s Sensor and Good News shaving products, Right Guard deodorant, Oral-B toothbrushes, Paper Mate pens and the like. Gillette described the deal as adding an additional leg to its existing business.
The deal completes the divestiture of Duracell by the buyout firm Kohlberg Kravis Roberts & Co., which purchased Duracell from Kraft for $1.8 billion in 1988. Since 1991, it had sold two-thirds of the business by selling shares publicly but until now had retained a 34 percent stake.
The transaction is a stock-swap calling for Duracell shareholders to receive 0.904 share of Gillette stock for each share they hold. At the market’s close Wednesday, the deal was worth about $7 billion.
Wall Street bid up Duracell shares this morning after the deal was first reported in The Wall Street Journal. Duracell was trading at $55.50, up $6.37 1/2 on the New York Stock Exchange before it was halted on the announcement. Gillette shares were down $1.37 1/2 at $63.75 on the NYSE.
Gillette is one of the nation’s leading marketers of household products. It had sales of $6.8 billion in 1995 and has a market value of $30 billion.
Duracell is the world’s biggest producer of alkaline batteries with an annual revenue of $2.3 billion. It has nearly 50 percent of the U.S. market in alkaline batteries.
Gillette and Duracell said they expect the deal to be completed by the end of this year, pending the approval of shareholders. KKR has already agreed to vote its shares in favor of the merger.