According to a report just out last night from TheWall Street Journal, fast-moving consumer goods (FMCG) giant Procter & Gamble
Combined, the new consumer products titan (let's call it P&2G) would have a market cap of $193.6 billion (3.5 billion shares times $55.32 per share), making it the largest FMCG company in the world, larger than current FMCG king Johnson & Johnson
P&2G would only just barely edge out J&J as "world's biggest" by market cap -- and that's something that will fluctuate on a day-by-day basis. If we look at the deal from a more stable perspective, say revenues, P&2G would outstrip J&J by a wide margin; the merged company would have combined annual sales of about $63 billion, or 37% more than J&J. Based on trailing 12 months' profit numbers, P&2G would earn more than $8.2 billion next year, for about a 13% net profit margin, as Gillette's higher-margin battery and razor-blade sales lent their earnings power to P&2G's combined results. That would still fall far short of J&J's enviable 20% margins, however.
The most urgent implications for the deal, however -- if it goes through -- seem likely to fall upon a much smaller player: Energizer Holdings
Read more about on the major FMCG players in:
- J&J: Dialing for Dollars
- Panasonic's Power Play
- Gillette's Clean Cut for Women
- Procter & Gamble's Rising Tide
Fool contributor Rich Smith holds no position in any of the companies mentioned in this article.
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