Filed by The Procter & Gamble Company
Pursuant to Rule 425 under the
Securities Act of 1933
Subject Company: The Gillette Company
Commission File No.: 001-00922
Registration No. 333-123309
P&G INSIDE
CORPORATE NEWS
P&G/Gillette Transition Planning Update
Transition team leaders Clayt Daley and
Jim Kilts share some of the Transition Steering Committee's initial
accomplishments. DETAILS [link] (Posted on 14-Apr-05)
P&G/GILLETTE TRANSITION PLANNING UPDATE
Integration Team Leaders:
Clayt Daley, Chief Financial Officer -- P&G
Jim Kilts, CEO - Gillette
14 April 2005
Our transition planning for the P&G/Gillette merger is now under way. As you may
recall, we announced in February the formation of TRANSITION INTEGRATION TEAMS
[link] at each company to handle the integration work/planning and contacts
between the companies until the transaction closes.
The leaders of each transition team, who are now part of a joint P&G/Gillette
Transition Steering Committee, met for the first time earlier this month. We
would like to share some of the Committee's initial accomplishments.
We agreed on five principles to guide the integration process:
1. MAINTAIN/BUILD P&G AND GILLETTE BUSINESS MOMENTUM. The most important
thing all employees can do is to focus on sustaining the growth of their
respective businesses while the transition teams work through the
government approval process and develop the integration plans. This also
holds true after the transaction closes as we begin implementing the
integration plans.
2. FIELD THE BEST TEAM. We are committed to fielding the best team of
Gillette and P&G employees for our combined business. We will seek the
best talent in every area, function and geography.
3. TREAT PEOPLE WITH DIGNITY/RESPECT. Showing respect for all individuals
at all times is key as we work through how the integration affects
employees. This includes giving people advance notice about how the
integration will affect them.
4. MOVE QUICKLY, MAKING DECISIONS PROMPTLY, OBJECTIVELY AND FAIRLY. Speed
is essential to create clarity for our people and to capture cost and
revenue synergies. Consequently, we will strive to make decisions as
quickly and effectively as possible.
5. COMMUNICATE OPENLY AND PROACTIVELY. We will make every effort to inform
employees first about important news affecting them. We expect to share
updates after each meeting of the Transition Teams/Steering Committee
and after key events and milestones leading up to the official closing
of the transaction. Some decisions and communications will be limited by
legal and regulatory requirements. We will strive to communicate as much
as we can on a timely basis. In addition, we will ensure there is
two-way communication, so employees have a way to get questions
answered.
We also made several key decisions about how the combined company will operate.
Overall, we intend to move to P&G systems and processes unless there is a strong
business reason to do otherwise. Specifically:
o ORGANIZATION STRUCTURE: We will operate within the P&G GLOBAL BUSINESS
UNIT STRUCTURE [link] (GBU)/Market Development Organization (MDO)/Global
Business Services (GBS).
o GBUS: We will create a new GBU, the GLOBAL GILLETTE BUSINESS UNIT,
consisting of the Blades/Razors, Braun and Duracell businesses. The new
Global Gillette GBU will report to Vice Chairman Jim Kilts and will
include Global Technical & Manufacturing (GTM) -- the manufacturing, R&D
and engineering functions supporting these operations. Blades/Razors
will continue to be based in Boston, Massachusetts; Braun in Kronberg,
Germany; and Duracell in Bethel, Connecticut, for the foreseeable
future.
Gillette's oral care and personal care businesses will be combined with
P&G's oral care and personal care/deodorant/Old Spice businesses, with
their respective locations yet to be determined. The combined oral care
business will report to Vice Chairman Kerry Clark, while the combined
personal care business will report to Vice Chairman Susan Arnold.
o COMMERCIAL OPERATIONS/MDOS: Our on-the-ground operations will go to
market as one company everywhere around the world. This means that P&G's
MDO and Gillette's Commercial Operations will merge into one
organization.
o SHARED SERVICES/GBS: The combined company will operate under P&G's
shared services model, incorporating Gillette's shared services, where
applicable. While the structure of shared services will be P&G's, the
capabilities will reflect the experience and expertise of both
organizations. Also, Gillette will adopt P&G's reporting framework,
moving to a fiscal year that ends on June 30.
WHAT HAPPENS NEXT
-----------------
We are aware that updates such as this one will generate new questions among
employees. We are committed to providing more, and more specific, information as
soon as we are able. Many decisions are still to be determined.
The next Steering Committee meeting will be held at the end of May, and we'll
share an update shortly after that meeting. Over the next several weeks,
transition team work will continue on developing plans to capture revenue and
cost synergies as well as work on the overall organization design.
In terms of what's next, we expect to mail the proxy about the special
shareholder meetings to approve the deal in May. The proxy will provide all
shareholders with information needed to consider and approve the proposed
merger. Both shareholder meetings will be scheduled within 4-6 weeks of the
proxy mailing; the specific dates will be included in the proxy.
We appreciate your interest and support for the future P&G/Gillette
organization. The most important thing all of us can do today is to stay focused
on growing our respective businesses so that we remain the most innovative
consumer products companies in the world.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
-------------------------------------------
In connection with the proposed merger, The Procter & Gamble Company ("P&G") has
filed a registration statement on Form S-4 with the Securities and Exchange
Commission (Registration No. 333-123309), containing a preliminary joint proxy
statement/prospectus. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE
DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE
IT WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain
a free copy of the definitive joint proxy statement/prospectus (when available)
and other documents filed by P&G and The Gillette Company ("Gillette") with the
Commission at the Commission's web site at http://www.sec.gov. Free copies of
the definitive joint proxy statement/prospectus, once available, and each
company's other filings with the Commission may also be obtained from the
respective companies. Free copies of P&G's filings may be obtained by directing
a request to P&G Investor Relations at 513-983-2415. Free copies of Gillette's
filings may be obtained by directing a request to Gillette Investor Relations at
617-421-8172.
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
PARTICIPANTS IN THE SOLICITATION
--------------------------------
P&G, Gillette and their respective directors, executive officers and other
members of their management and employees may be soliciting proxies from their
respective stockholders in favor of the merger. Information concerning persons
who may be considered participants in the solicitation of P&G's stockholders
under the rules of the Commission is set forth in the Proxy Statement filed by
P&G with the Commission on August 27, 2004, and information concerning persons
who may be considered participants in the solicitation of Gillette's
stockholders under the rules of the Commission is set forth in the Proxy
Statement filed by Gillette with the Commission on April 12, 2004.
FORWARD-LOOKING STATEMENTS
--------------------------
All statements, other than statements of historical fact included in this
release, are forward-looking statements, as that term is defined in the Private
Securities Litigation Reform Act of 1995. In addition to the risks and
uncertainties noted in this release, there are certain factors that could cause
actual results to differ materially from those anticipated by some of the
statements made. These include: (1) the ability to achieve business plans,
including with respect to lower income consumers and growing existing sales and
volume profitably despite high levels of competitive activity, especially with
respect to the product categories and geographical markets (including developing
markets) in which the Company has chosen to focus; (2) the ability to
successfully execute, manage and integrate key acquisitions and mergers,
including (i) the Domination and Profit Transfer Agreement with Wella, and (ii)
the Company's agreement to merge with The Gillette Company, including obtaining'
the related required shareholder and regulatory approvals; (3) the ability to
manage and maintain key customer relationships; (4) the ability to maintain key
manufacturing and supply sources (including sole supplier and plant
manufacturing sources); (5) the ability to successfully manage regulatory, tax
and legal matters (including product liability, patent, and other intellectual
property matters), and to resolve pending matters within current estimates; (6)
the ability to successfully implement, achieve and sustain cost improvement
plans in manufacturing and overhead areas, including the Company's outsourcing
projects; (7) the ability to successfully manage currency (including currency
issues in volatile countries), debt (including debt related to the Company's
announced plan to repurchase shares of the Company's stock), interest rate and
certain commodity cost exposures; (8) the ability to manage the continued global
political and/or economic uncertainty and disruptions, especially in the
Company's significant geographical markets, as well as any political and/or
economic uncertainty and disruptions due to terrorist activities; (9) the
ability to successfully manage the pattern of sales, including the variation in
sales volume within periods; (10) the ability to successfully manage competitive
factors, including prices, promotional incentives and trade terms for products;
(11) the ability to obtain patents and respond to technological advances
attained by competitors and patents granted to competitors; (12) the ability to
successfully manage increases in the prices of raw materials used to make the
Company's products; (13) the ability to stay close to consumers in an era of
increased media fragmentation; and (14) the ability to stay on the leading edge
of innovation. For additional information concerning factors that could cause
actual results to materially differ from those projected herein, please refer to
our most recent 10-K, 10-Q and 8-K reports.