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While during the period 2000-2005, Procter and Gamble has registered significant growths, Gillette has also increased their profits, but a slower rate. Both companies have followed a constantly ascendant trend, but at different growth rates. P&G's net sales for 2005 had registered a 42% increase as compared to the company's net sales of 2000. Gillette's net sales for 2005 were higher with 36% as compared to the sales of 2000. Over the six fiscal years (2000-2005), P&G registered a 42% growth rate in long-term debts, while Gillette's debts only grew by 29%. P&G's free cash flow growth rate is also superior to Gillette's, but the productivity of the free cash flow is inferior. The addition of Gillette is expected to increase P&G's bottom line.

4. The price paid by Procter and Gamble to purchase Gillette seems rather high, but the investment is expected to return in the form of increased sales and cost reductions. The 20% premium is appropriate as it is aligned with other premium shares offered by other mergers and acquisitions in the industry. Also, the 0.975 exchange ratio of P&G shares per one Gillette share seems rather fair, as nor Gillette neither Procter and Gamble shareholders are faced with major lossess. However, it would have been perfectly fair for the shares to be exchanged at a 1: 1 ratio.

5. The studied data reveal that Procter and Gamble bases their business strategy on mergers and acquisitions of important brands that bring value to the company. However, their own efforts to increase this value are rather limited. First of all, P&G executives should cease any future mergers and acquisitions and focus on increasing the value of their current products. In addition, they should integrate the Gillette products, as well as other purchased products under the culture and values of P&G. They should eliminate from the lineup those units which fail to become integrated or do not retrieve the desired productivity.