Mention the word synergies after a blockbuster merger or acquisition and cynics will respond: ‘How many job cuts?’
However, if the tie-up is going to deliver, P&G will have to do more than cut overheads and boost distribution in China, according to brand experts.
It’s a cliché, said Nick Liddell, director of brand valuation at Interbrand, but P&G also needs to prove the new business is worth more than the sum of its parts. “Look at the co-branding opportunities Gillette has already missed - such as the M3Power.”
“It was powered by Duracell, but it didn’t make a big thing of this on the packaging. There must be opportunities for P&G to boost men’s toiletries using its expertise with women.”
As for innovation, both brands have an impressive track record, with P&G particularly successful with gadgets such as Febreze electric air fresheners and electronic make-up applicators in the US this year.
The Gillette M3Power launch was also a hit in the US, although legal wrangling with rival Wilkinson Sword has thwarted progress elsewhere.
But most developments have been brand extensions such as variants of Pantene, said one buyer. “Companies such as Unilever and P&G are concentrating on brands with global potential. Unless there is a genuinely new category, they are not going to create a completely new brand if it’s just going to do a few million.”
The good news for P&G is that most of the key categories in which it operates are showing good growth in the UK, according to TNS Superpanel data for the year to January 2005, with razors and blades up 9%, haircare up 3%, skincare up 10% and batteries up 5%.