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NEW YORK (CNN/Money) - Procter & Gamble announced the largest acquisition in its history Friday, agreeing to buy Gillette in a $57 billion deal that combines some of the world's top brands and could lead to further mergers involving products consumers know and love the best. Procter & Gamble (Research) is already the nation's largest consumer products company, making everything from Pampers to Tide, from Crest toothpaste to Head & Shoulders shampoo. Products from Gillette (Research) include not only its signature razors but also Duracell batteries and Braun and Oral-B brands dental care products. Under the deal announced early Friday, Procter & Gamble will pay 0.975 share of its common stock for each share of Gillette common stock. Based on Thursday closing prices, that would represent an 18 percent premium for Gillette shares. The news sent shares of P&G down more than 4 percent to $52.90 in iNet trading, according to Reuters, while Gillette shares gained nearly 10 percent to $50.25. The deal won the praise of Gillette's largest shareholder, billionaire investor Warren Buffett, whose company Berkshire Hathaway (Research) owns 96 million shares of Gillette, or about 9 percent of the company. "This merger is going to create the greatest consumer products company in the world," said a statement from Buffett. "It's a dream deal." He said he would increase his holdings so that he would end up with 100 million shares of P&G by the time the deal closes. The deal will mean about 6,000 job cuts, or about 4 percent of the combined work force of 140,000 employees. It said most of the cuts would come from eliminating management overlaps and consolidation of business support functions. |