In the merger, still awaiting approval from regulators and shareholders, Procter & Gamble would pair its marketing and distribution strategy with Gillette's high-profit assets.
Executives from both companies met with Wall Street analysts Friday, saying that the merger would complement both firms' stable of products and widen their consumer base. P&G's products, including beauty and home brands such as Clairol shampoo, Pampers diapers and Tide laundry detergent, are marketed mainly to women. Gillette's razors, along with Duracell batteries and Braun appliances, are primarily targeted at men.
"We believe we can bring these companies together and create a juggernaut," Gillette Chief Executive James Kilts said at the Friday meeting, the Associated Press reported. After the merger, Kilts will become vice chairman of P&G and join its board. He also agreed to stay on for at least a year to supervise integration of both firms.
The bid would create a company with more than $60 billion in revenues, a strategic advantage when negotiating with super-retailers such as Wal-Mart Stores Inc., which often put pressure on consumer-products providers to lower cost ceilings, according to the AP.
P&G has more than three times as many employees as Gillette. Executives outlined a plan that would eliminate about 4 percent of the combined work force, or 6,000 jobs out of 140,000, in efforts to cut costs.
At the Friday meeting, P&G Chief Executive A.G. Lafley, who has overseen a period of renewed growth in the past four years, acknowledged that there is some overlap between the two companies, but expressed optimism that the combined firms would not be forced to divest many of its holdings as part of an antitrust review.
After the Friday announcement, shares of Gillette stock climbed $5.72 a share, or 12.5 percent, to $51.40 on the New York Stock Exchange. P&G's fell $1.50, or 2.7 percent, on the NYSE.