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March of 2003 Acquisition announced on March 18th, 2003

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Did proctor and gamble's stock rise with the purchase of Wella AG?

P&G Stock did indeed rise at the same time as the Wella acquisition was announced on March 18th, 2003. However P&G underperformed vs. the Dow Jones Index during the week of the acquisition (see below). It was generally felt P&G had paid too high a premium, and this reflected negatively on P&G Stock. This was further compounded when P&G had to raise its bid in an attempt to squeeze out the remaining stockholders. To this day, Wella remains an unsatisfactory acquisition for P&G. The Wella business has declined significantly, and has yet to reach pre-acquisition levels. One key reason for this is P&G's inability to integrate employees from outside into its own culture, frequently treating acquired employees as second class citizens. Of the ~ 17.000 Wella employees in 2003, it is estimated that less than 2.000 are left within P&G, largely in production and non-management roles. Closing prices in New York .......................P&G.....Dow Jones 14th Mar 03: 83,40 ... 7.859 17th Mar 03: 85,50 ... 8.141 18th Mar 03: 86,62 ... 8.194 19th Mar 03: 87,92 ... 8.265 20th Mar 03: 88,00 ... 8.286 21st Mar 03: 88,80 ... 8.522 Growth:..........5,5% ... 8,4%


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