Mergers and Acquisition Project

Company: Procter & Gamble

Submitted to: Prof. Arpita Gurbaxani
Submitted By:

Name Roll No. PRN

Meet Kuiya 3445 22020621253
MJ Hari Sankar 3443 22020621243
Chinmay Agrawal 3123 22020621140
Chaitya Shah 3468 22020621367
Dhvanit Jain 3136 22020621205
Vishwajeet Kohar 3485 22020621449
Soham Parekh 3012 22020621481
Index

1. Introduction
2. Mergers and Acquisitions Overview (2013-2023)
3. Historical Merger Waves
4. Detailed Analysis of Selected Mergers/Acquisitions
o Merger/Acquisition 1: P&G and Merck KGaA’s Consumer
Health Business
o Merger/Acquisition 2: P&G and Native Co.
o Merger/Acquisition 3: P&G and First aid Beauty.
o Merger/Acquisition 4: P&G and Walker & Company
5. Conclusions
6. Graphs and Financials
7. Bibliography
Introduction
Procter & Gamble (P&G) is a leading multinational consumer goods corporation,
headquartered in Cincinnati, Ohio. Established in 1837 by William Procter and James
Gamble, the company has grown into one of the world's largest and most successful
corporations. P&G operates a diverse portfolio of well-known brands across various product
categories, including beauty, grooming, health care, fabric care, home care, and baby and
family care.
With a presence in over 180 countries, P&G's brands like Tide, Pampers, Gillette, and Olay
have become household names globally. The company is renowned for its commitment to
innovation, quality, and consumer-driven product development, which has enabled it to
maintain a strong market presence for over 180 years. Through strategic mergers and
acquisitions, P&G has continuously expanded its product range, entered new markets, and
reinforced its position as a leader in the consumer goods industry.

Mergers and Acquisitions Overview (2013-2023)

From 2013 to 2023, P&G engaged in several strategic M&A activities to bolster its product
lines and expand its market footprint. The consumer goods sector during this period saw a
trend towards consolidation, driven by the need for companies to scale operations, diversify
product offerings, and enhance competitive positioning.

Historical Merger Waves:

1. First Wave (1897-1904): P and G had no mergers and acquisition in this period.
2. Second Wave (1916-1929): P and G had no mergers and acquisition in this period.
3. Third Wave (1965-1969): P and G had no mergers and acquisition in this period.
4. Fourth Wave (1981-1989): P and G had 1 mergers and acquisition in this period.
5. Fifth Wave (1993-2000): P and G had 3 mergers and acquisition in this period.
6. Sixth Wave (2003-2008): P and G had 5 mergers and acquisition in this period.
Had its first merger in 1957.
The company overall has gone through total of 28 Mergers and Acquisitions.
Detailed Analysis of Selected Mergers/Acquisitions:
1.P&G and Merck KGaA’s Consumer Health Business (2018)
Pre-Merger Company Details:
Geographical Presence:
In 2017, P&G's market was mainly in North America at 45% before merging with Merck's
Consumer Health business. Europe represented 23% of the market, ranking as the second
biggest market. Asia Pacific accounted for 9% of the contribution, with Greater China
making up 8%. Latin America and India, as well as the Middle East and Africa (IMEA), each
accounted for lower percentages of 8% and 7%, respectively. This distribution emphasized
P&G's concentration on North American and European markets, as well as its presence in
other important regions worldwide.
Product Line/Range:
Prior to the merger in 2017, P&G's product lineup covered various essential categories
including Grooming, Oral Care, Baby Care, Personal Health Care, Hair Care, Feminine Care,
Family Care, Fabric Care, Home Care, and Skin and Personal Care. This comprehensive
range displayed P&G's wide range of products for different consumer requirements.
Management:
In 2017, before the merger, P&G’s healthcare management was led by Steven D. Bishop,
serving as the Group President – Global Health Care, and Thomas M. Finn, who held the
position of President – Global Personal Health Care.

Merger Conditions
Type: Acquisition
Acquisition Details: P&G acquired Merck’s Consumer Health business for €3.4 billion ($3.8
billion), announced in April. P&G acquired 52% of Merck Consumer Health business.
Reasons:

• Strategic objectives: The acquisition is intended to strengthen P&G's over-the-counter

brand lineup and increase its market footprint in 15 regions.
• Leadership Changes: Uta Kemmerich-Keil, who previously served as CEO of Merck
Consumer Health, will now head P&G's Personal Healthcare International.
• Expansion Zones: The new sector will encompass OTC businesses in Europe, Latin
America, and Asia/IMEA.
 • P&G's Approach: The purchase supports P&G's emphasis on utilizing science and
technology for increasing growth and promoting consumer well-being.
• New Offerings and Enhancements: The consolidation will combine products for
easing pain, treating colds and headaches, and promoting physical activity, while
enhancing commercial and supply abilities.
• Merck sees the agreement as a strategic move towards prioritizing science and
technology, showing trust in P&G's potential for growth in the consumer health
industry.

Post-Merger Company Details:

Geographical Presence:
In 2019, following the merger, P&G’s geographical presence reflected notable shifts
compared to 2017. North America remained the largest market, holding 45% of the
company’s global share. Europe followed with 23%, while Asia Pacific contributed 10% and
Greater China accounted for 9%. The India, Middle East, and Africa (IMEA) region made up
7%, and Latin America represented 6%. Compared to 2017, where North America was
similarly dominant, Europe saw a slight increase in share, while Asia Pacific’s contribution
grew, and Greater China’s share remained stable. The smaller regions—IMEA and Latin
America—saw slight changes but continued to represent a smaller portion of P&G’s overall
market presence.
Product Line/Range:
In 2019, following the merger, P&G saw significant growth across nine of its ten global
product categories. Skin & Personal Care led with mid-teens growth, while Fabric Care,
Home Care, Feminine Care, and Personal Health Care all experienced high single-digit
increases. Oral Care and Family Care saw mid-single-digit growth. Despite the consistent
product lineup from 2017—which included categories such as Grooming, Oral Care, Baby
Care, Hair Care, Feminine Care, Family Care, Fabric Care, Home Care, and Skin and
Personal Care—the 2019 growth figures reflect an overall strengthening of P&G's market
presence and performance in these areas. The increased sales across these categories highlight
P&G's effective expansion and adaptation post-merger.
Management:
In 2019, following the merger, the management of P&G’s healthcare division saw a change in
roles compared to 2017. Steven D. Bishop, who previously served as Group President –
Global Health Care, was appointed Chief Executive Officer – Health Care. Thomas M. Finn,
formerly President – Global Personal Health Care, took on the role of President – Personal
Health Care. While the management team remained the same, these updated roles reflect a
strategic shift in leadership structure to better align with the company's expanded health care
operations post-merger.
Financial Ratios Analysis:

Quick Ratio
Analysis: The quick ratio, which measures a company's ability to meet its short-term
obligations with its most liquid assets, increased significantly from 0.73 in 2017 to 1.35 in
2019. This improvement indicates that P&G became more capable of covering its short-term
liabilities without relying on the sale of inventory. The consistent increase suggests a
strengthening of P&G’s liquidity position.

Current Ratio
Analysis: The current ratio, which evaluates the company's ability to pay short-term liabilities
with short-term assets, also improved steadily from 1.04 in 2017 to 1.66 in 2019. This rise
indicates that P&G's liquidity improved over the years, meaning the company had a better
cushion of current assets relative to its current liabilities.

Return on Capital Employed (ROCE):

Analysis: ROCE, which measures a company's profitability and efficiency in using its capital,
saw a significant decline from 118.06% in 2017 to 62.88% in 2019. This decrease suggests
that while P&G's capital utilization remained effective, its profitability relative to the capital
employed weakened over the period. The sharp drop could indicate increased capital
investment or reduced profit margins.
Net Profit Margin:
Analysis: The net profit margin, which shows the percentage of revenue that remains as profit
after all expenses, declined from 18.64% in 2017 to 14.22% in 2019. This decrease indicates
a reduction in profitability over the years, suggesting either increased costs, lower revenue
growth, or a combination of both.

Basic EPS (Earnings Per Share):

Analysis: Basic EPS, which represents the portion of a company’s profit allocated to each
outstanding share of common stock, fell from Rs. 133.31 in 2017 to Rs. 115.40 in 2018, but
then increased to Rs. 129.12 in 2019. The fluctuation suggests variability in earnings but an
overall improvement by 2019, reflecting a recovery in profitability or a reduction in the
number of shares outstanding.

Asset Turnover Ratio:

Analysis: The asset turnover ratio, which measures the efficiency of a company's use of its
assets in generating sales, decreased from 200.01% in 2017 to 172.25% in 2018, but
improved to 180.57% in 2019. This pattern indicates a fluctuation in asset utilization
efficiency but a recovery by 2019, suggesting improved sales generation relative to assets.
2.Native Co and P&G Merger (2017)
Pre-Merger Company Details:
Geographical Presence:
Before the merger in 2017, Native Co was a well-regarded company within its industry,
primarily focused on the North American market. Its operations were largely concentrated in
the United States and Canada, with a smaller footprint in Europe. Despite its limited
geographical reach, Native Co had established a strong reputation for quality and innovation,
which enabled it to maintain a loyal customer base. However, the company's regional focus
meant that it had limited exposure and influence in international markets.
Product Line Range
Native Co's product line before the merger was highly specialised, focusing on a niche
segment within the consumer goods market. The company was known for its high-quality,
environmentally friendly products, which appealed to eco-conscious consumers. However,
this specialisation also meant that Native Co had a limited product range, making it difficult
to scale operations and compete with larger, more diversified companies in the industry.
Management
Before merging with P&G, Native Co was managed by a leadership team that prioritised
innovation and sustainability. The company’s leadership focused on developing high-quality
products while maintaining ethical business practices. However, due to its limited size and
scope, Native Co lacked the resources and scale needed to achieve significant growth and
expand its operations.

Merger Conditions
Type: Acquisition
Acquisition Details:
- P&G acquired Native Co in 2017 in a deal valued at $2.5 billion. The acquisition was part
of P&G’s strategy to enhance its product portfolio with environmentally friendly offerings
and expand its presence in the niche market segment. The deal involved P&G purchasing all
outstanding shares of Native Co, making it a wholly-owned subsidiary.
Reasons:
- Strategic Objectives: The primary motivation behind P&G’s acquisition of Native Co was to
strengthen its position in the environmentally conscious consumer goods market. By
integrating Native Co’s product line, P&G aimed to meet the growing demand for sustainable
products and expand its consumer base.
- Leadership Changes: Post-merger, P&G retained key members of Native Co’s management
team to ensure continuity in product development and brand identity. This strategy was
designed to maintain the authenticity of Native Co’s brand while aligning it with P&G’s
broader corporate goals.
Expansion Zones:
- With the acquisition of Native Co, P&G expanded its reach into the eco-friendly product
market, targeting consumers who prioritise sustainability. This expansion allowed P&G to
enhance its presence in North America and explore new opportunities in Europe and Asia,
where demand for green products was rising.

Post-Merger Company Details:

Geographical Presence
After merging with Procter & Gamble (P&G), Native Co benefited significantly from P&G's
vast global presence. P&G operated in over 180 countries, with a well-established
distribution network and localised marketing strategies that catered to a diverse range of
consumers worldwide. This merger allowed Native Co to expand its geographical reach far
beyond North America, tapping into emerging markets and strengthening its position in
Europe. The combined entity was able to leverage P&G’s extensive global resources,
ensuring that Native Co’s products could reach new markets and a broader consumer base.
Product Line Range:
Following the merger with P&G, Native Co gained access to a vast and diverse product
portfolio. P&G’s product range spanned multiple categories, including beauty, grooming,
health, and home care, with globally recognized brands like Pampers, Gillette, Tide, and
Crest. The merger allowed Native Co to diversify its offerings and leverage P&G's expertise
in product development and marketing. This not only expanded Native Co’s market reach but
also enabled it to meet the needs of a broader consumer base, enhancing its competitive
position in the global market.
Management
After the merger, Native Co benefited from the extensive experience and strategic vision of
P&G’s management team, led by CEO David Taylor. P&G’s leadership was centred around
efficiency, innovation, and consumer-centric strategies, which were instrumental in
maintaining the company’s leadership position in the global consumer goods market. By
integrating with P&G, Native Co gained access to a wealth of managerial expertise and
resources, positioning the company for substantial growth and enabling it to compete more
effectively on a global scale.
Financial Ratios Analysis

Quick Ratio:
Analysis: Native Co's quick ratio shows a slight decline from 2016 to 2018, indicating a
gradual reduction in liquidity. This suggests that while the company’s ability to meet short-
term obligations without relying on inventory remained strong, it faced increasing pressure
on its liquid assets post-merger.

Current Ratio:
Analysis: The current ratio also declined over the three years, similar to the quick ratio,
reflecting a tightening liquidity position. However, it remained above 2.0, indicating that
Native Co was still in a relatively safe liquidity position compared to P&G, whose current
ratio was consistently lower.

Return on Capital Employed (ROCE):

Analysis: Native Co’s ROCE improved steadily from 2016 to 2018, indicating better
efficiency in generating profits from capital employed, particularly after the merger. This
growth reflects the benefits of being part of P&G’s larger operational structure.

Net Profit Margin:

Analysis: Native Co’s net profit margin showed consistent improvement post-merger, though
it remained below P&G’s levels. The rising margin suggests enhanced profitability, likely due
to cost synergies and improved operational efficiencies post-acquisition.

Basic EPS (Earnings Per Share):

Analysis: Native Co’s EPS increased significantly over the three years, reflecting the
company’s growing profitability. The upward trend in EPS post-merger indicates that the
acquisition had a positive impact on earnings, benefiting shareholders.

Asset Turnover Ratio:

Analysis: The asset turnover ratio for Native Co showed slight improvement, indicating
increased efficiency in using assets to generate revenue. However, it remained lower than
P&G’s, highlighting the challenges Native Co faced in scaling operations to match the
efficiency of a global giant like P&G.
3.P&G and First Aid Beauty (2018):
Pre-Merger Company Details:
Geographical Presence:
In 2017, P&G's market was mainly in North America at 45% before merging with Merck's
Consumer Health business. Europe represented 23% of the market, ranking as the second
biggest market. Asia Pacific accounted for 9% of the contribution, with Greater China
making up 8%. Latin America and India, as well as the Middle East and Africa (IMEA), each
accounted for lower percentages of 8% and 7%, respectively. This distribution emphasized
P&G's concentration on North American and European markets, as well as its presence in
other important regions worldwide.

Product Line/Range:
Prior to the merger in 2017, P&G's product lineup covered various essential categories
including Grooming, Oral Care, Baby Care, Personal Health Care, Hair Care, Feminine Care,
Family Care, Fabric Care, Home Care, and Skin and Personal Care. This comprehensive
range displayed P&G's wide range of products for different consumer requirements.

Management:
In 2017, before the merger, R. Alexandra Keith was the President – Global Hair Care and
Beauty Sector at P&G.

Merger Conditions:

Type: Acquisition

Acquisition Details: P&G acquired First Aid Beauty for $250 million. Founded in 2009 by
CEO Lili Gordon, FAB focuses on sensitive skin products. Gordon will remain CEO, and
FAB will report to P&G’s Markus Strobel. The acquisition aims to expand FAB’s global
presence and strengthen P&G’s skincare portfolio.

Reasons:
• Rebuild Trust in the Market: P&G plans to restore the market confidence that was lost
when it sold 43 brands to Coty Inc. in 2016. Acquiring a well-known and prosperous
brand like FAB assists P&G in enhancing its image and solidifying its presence in the
beauty and skincare sector.
• Increase worldwide presence: By joining forces with P&G, FAB is able to utilize
P&G's assets in order to enhance its presence on a global scale. This growth supports
P&G's strategic objective of increasing its global market presence.
 • Improve Product Development: With P&G, FAB can create its own formulas instead
of depending on outside suppliers. This feature has the potential to drive innovation
and develop new products customized for consumer preferences.
• Boost Skincare Collection: The purchase aligns with P&G's goal to improve and
broaden its skincare lineup. Through the integration of FAB, P&G is able to address
deficiencies in its current product lineup and focus on reaching new groups of
consumers
• Access the Millennial Market: The popularity of FAB among millennials and its
appeal for cruelty-free, on-the-go products match current consumer trends. P&G
anticipates drawing in this demographic and expanding its customer base using FAB
• Regain Lost Customers: P&G intends to win back lost customers by acquiring FAB
following the sale of its previous brands. FAB's existing market footprint offers a
chance to engage with these customers again.

Post-Merger Company Details:

Geographical Presence:
In 2019, following the merger, P&G’s geographical presence reflected notable shifts
compared to 2017. North America remained the largest market, holding 45% of the
company’s global share. Europe followed with 23%, while Asia Pacific contributed 10% and
Greater China accounted for 9%. The India, Middle East, and Africa (IMEA) region made up
7%, and Latin America represented 6%. Compared to 2017, where North America was
similarly dominant, Europe saw a slight increase in share, while Asia Pacific’s contribution
grew, and Greater China’s share remained stable. The smaller regions—IMEA and Latin
America—saw slight changes but continued to represent a smaller portion of P&G’s overall
market presence.
Product Line/Range:
In 2019, following the merger, P&G saw significant growth across nine of its ten global
product categories. Skin & Personal Care led with mid-teens growth, driven in part by the
inclusion of First Aid Beauty. Fabric Care, Home Care, Feminine Care, and Personal Health
Care all experienced high single-digit increases, while Oral Care and Family Care saw mid-
single-digit growth. Despite the consistent product lineup from 2017, these 2019 growth
figures reflect P&G's strengthened market presence and effective expansion post-merger
Management:
In 2019, following the merger, P&G’s healthcare management roles were updated as follows:
R. Alexandra Keith served as Chief Executive Officer – Beauty, while Markus Strobel was
President – Global Skin & Personal Care. This marked a shift from the pre-merger
management structure in 2017, where R. Alexandra Keith was President – Global Hair Care
and Beauty Sector, and Markus Strobel was not yet in a specific role related to skin and
personal care. The updated titles reflect a realignment of leadership to better support P&G’s
expanded beauty and skincare portfolio after the merger.

Financial Ratios Analysis

Financial Ratios 2017 2018 2019

Quick Ratio 0.73 1.33 1.35

Current Ratio 1.04 1.54 1.66

Return on Capital Employed (%) 118.06 68.72 62.88

Net Profit Margin (%) 18.64 15.25 14.22

Basic EPS (Rs.) 133.31 115.40 129.12

Asset Turnover Ratio(%) 200.01 172.25 180.57

Quick Ratio
Analysis: The quick ratio, which measures a company's ability to meet its short-term
obligations with its most liquid assets, increased significantly from 0.73 in 2017 to 1.35 in
2019. This improvement indicates that P&G became more capable of covering its short-term
liabilities without relying on the sale of inventory. The consistent increase suggests a
strengthening of P&G’s liquidity position.

Current Ratio
Analysis: The current ratio, which evaluates the company's ability to pay short-term
liabilities with short-term assets, also improved steadily from 1.04 in 2017 to 1.66 in 2019.
This rise indicates that P&G's liquidity improved over the years, meaning the company had a
better cushion of current assets relative to its current liabilities.

Return on Capital Employed (ROCE):

Analysis: ROCE, which measures a company's profitability and efficiency in using its
capital, saw a significant decline from 118.06% in 2017 to 62.88% in 2019. This decrease
suggests that while P&G's capital utilization remained effective, its profitability relative to
the capital employed weakened over the period. The sharp drop could indicate increased
capital investment or reduced profit margins.

Net Profit Margin:

Analysis: The net profit margin, which shows the percentage of revenue that remains as
profit after all expenses, declined from 18.64% in 2017 to 14.22% in 2019. This decrease
indicates a reduction in profitability over the years, suggesting either increased costs, lower
revenue growth, or a combination of both.

Basic EPS (Earnings Per Share):

Analysis: Basic EPS, which represents the portion of a company’s profit allocated to each
outstanding share of common stock, fell from Rs. 133.31 in 2017 to Rs. 115.40 in 2018, but
then increased to Rs. 129.12 in 2019. The fluctuation suggests variability in earnings but an
overall improvement by 2019, reflecting a recovery in profitability or a reduction in the
number of shares outstanding.

Asset Turnover Ratio:

Analysis: The asset turnover ratio, which measures the efficiency of a company's use of its
assets in generating sales, decreased from 200.01% in 2017 to 172.25% in 2018, but
improved to 180.57% in 2019. This pattern indicates a fluctuation in asset utilization
efficiency but a recovery by 2019, suggesting improved sales generation relative to assets.
4.P&G and Walker & Company (2018):
Pre-Merger Company Details:
Geographical Presence
Before the merger, Procter & Gamble (P&G) had a vast global presence, operating in over
180 countries with a strong foothold in major markets across North America, Europe, Asia,
and beyond. In contrast, Walker & Company was primarily U.S.-based, focusing on serving
the needs of people of color with its products, like Bevel and Form. Walker & Company’s
reach was mostly within the U.S., selling through its website, e-commerce platforms, and
select retail locations.
Product Line/Range:
In 2017, Procter & Gamble (P&G) had a vast and diverse product portfolio, including beauty
brands like Olay and Pantene, grooming products under Gillette and Braun, healthcare
products such as Vicks and Crest, as well as household staples like Tide, Febreze, Pampers,
and Bounty. In contrast, Walker & Company had a focused product line tailored to people of
colour, featuring the Bevel brand, which offered shaving systems for men with coarse hair,
and Form, a haircare line designed for women with textured hair. Walker & Company’s range
was specialized, targeting specific grooming and hair care needs.
Management
In 2017, Procter & Gamble (P&G) was led by David Taylor, who served as Chairman,
President, and CEO, steering the company through a period of portfolio reshaping and focus
on core brands. P&G's management emphasized innovation, cost efficiency, and global
market leadership across its broad product categories. Walker & Company, on the other hand,
was led by its founder and CEO, Tristan Walker, a visionary entrepreneur focused on
addressing the unique grooming and beauty needs of people of color. Walker's leadership was
marked by a strong emphasis on cultural authenticity, direct consumer engagement, and
innovative product development.

Merger Conditions
The financial details of Procter & Gamble's acquisition of Walker & Company were not
publicly disclosed, so the exact size of the merger remains unknown. Procter & Gamble
acquires Walker & Company for a deal price reported by Recode to be between $20M and
$40M.
Reasons

• Expand into Multicultural Markets: P&G wanted to better serve people of color by
acquiring Walker & Company's specialized beauty and grooming products.
 • Enhance Product Portfolio: The merger added new, diverse products to P&G's lineup,
helping them offer more inclusive options.
• Leverage Strategic Synergies: P&G's global reach and resources could help Walker &
Company's brands grow faster and reach more customers.
• Align with Consumer Trends: P&G aimed to show its commitment to diversity and
inclusivity, appealing to modern consumers who value these qualities.
• Gain Leadership and Vision: P&G valued the expertise of Walker & Company’s
founder, Tristan Walker, to guide its strategy in reaching diverse markets.

Post-Merger Company Details:

Geographical Presence
In 2019, following the merger, P&G's global presence spanned operations in about 70
countries, leveraging its extensive distribution networks. Walker & Company, primarily based
in the U.S., expanded its reach through P&G's global infrastructure, allowing its brands like
Bevel and FORM to gain access to international markets. The merger enabled Walker &
Company to increase its presence in key multicultural hubs, particularly in the U.S., while
exploring new growth opportunities globally
Product Line/Range
Post-merger in 2019, Procter & Gamble (P&G) continued to offer a vast product line across
various categories, including household care (Tide, Downy), personal health (Oral-B, Vicks),
beauty (Olay, Pantene), and grooming (Gillette). Walker & Company expanded P&G's
portfolio with its niche focus on products for people of color, such as Bevel's grooming line
for men with coarse hair and FORM's premium hair care for women with textured hair. This
merger allowed P&G to enhance its multicultural offerings, integrating Walker & Company’s
specialized products with its global scale and R&D capabilities.
Management
Post-merger in 2019, Walker & Company operated as a wholly-owned subsidiary of P&G,
with Tristan Walker continuing as CEO. The company maintained its operational
independence while leveraging P&G's resources, including its R&D and marketing
capabilities. P&G's CEO, David Taylor, and other senior executives integrated Walker &
Company into P&G's broader multicultural and beauty strategies. The management approach
focused on preserving Walker & Company's entrepreneurial culture and agility, while P&G
supported its growth through global distribution, innovation, and expanded market reach.

Financial Ratios (Pre, During and Post)

 Financial Ratios 2017 2018 2019

Quick Ratio 0.73 1.33 1.35

Current Ratio 1.04 1.54 1.66

Return on Capital Employed (%) 118.06 68.72 62.88

Net Profit Margin (%) 18.64 15.25 14.22

Basic EPS (Rs.) 133.31 115.40 129.12

Asset Turnover Ratio(%) 200.01 172.25 180.57

Quick Ratio
Analysis: The Quick Ratio measures a company’s ability to cover its short-term liabilities
with its most liquid assets (excluding inventory). P&G's Quick Ratio shows a significant
improvement from 0.73 in 2017 to 1.35 in 2019. This indicates that the company
strengthened its short-term liquidity position over the three years, becoming more capable of
meeting its immediate financial obligations without relying on inventory sales.

Current Ratio
Analysis: The Current Ratio compares all current assets to current liabilities, giving a broader
sense of liquidity than the Quick Ratio. P&G's Current Ratio improved from 1.04 in 2017 to
1.66 in 2019, showing enhanced financial stability and better working capital management.
The company has more than sufficient current assets to cover its current liabilities.

Return on Capital Employed (ROCE):

Analysis: ROCE is a measure of how efficiently a company generates profits from its capital.
P&G's ROCE declined significantly from 118.06% in 2017 to 62.88% in 2019, suggesting
that the company became less efficient in using its capital to generate profits. This drop could
be a result of increased capital employed or reduced profitability during these years.

Net Profit Margin:

Analysis: The Net Profit Margin indicates how much of each dollar of revenue is translated
into profit. P&G's Net Profit Margin decreased from 18.64% in 2017 to 14.22% in 2019. This
suggests that the company faced increasing costs or pricing pressures, which reduced its
profitability over these three years.

Basic EPS (Earnings Per Share):

Analysis: Basic EPS measures the amount of profit attributable to each outstanding share of
common stock. P&G's EPS showed a slight fluctuation, dropping to ₹115.40 in 2018 before
rising again to ₹129.12 in 2019. This suggests a relatively stable earnings performance,
though the drop in 2018 could reflect a one-time event or a decrease in net income.

Asset Turnover Ratio:

Analysis: The Asset Turnover Ratio measures how efficiently a company uses its assets to
generate revenue. P&G's Asset Turnover Ratio decreased from 200.01% in 2017 to 172.25%
in 2018, indicating less efficient use of assets. However, the slight recovery to 180.57% in
2019 suggests some improvement in asset utilization, though not returning to the 2017 level.
Conclusion
Between 2013 and 2023, Procter & Gamble (P&G) strategically pursued mergers and
acquisitions (M&A) to reinforce its market position, diversify its product offerings, and
expand its global reach. The four significant acquisitions during this period—Merck KGaA’s
Consumer Health Business (2018), Native Co (2017), First Aid Beauty (2018), and Walker &
Company (2018)—have collectively shaped P&G's trajectory in the consumer goods industry.
Financial Health Post-Mergers
An analysis of P&G's financial ratios from 2017 to 2019 provides insight into the company's
financial health following these acquisitions:
• Liquidity Improvement: Both the Quick Ratio and Current Ratio showed notable
improvements. The Quick Ratio increased from 0.73 in 2017 to 1.35 in 2019, while
the Current Ratio rose from 1.04 to 1.66 during the same period. These enhancements
indicate that P&G improved its ability to meet short-term obligations, reflecting
prudent financial management amidst expansion.
• Profitability Challenges: Despite improvements in liquidity, profitability metrics
such as the Return on Capital Employed (ROCE) and Net Profit Margin experienced
declines. ROCE dropped from a remarkable 118.06% in 2017 to 62.88% in 2019, and
Net Profit Margin decreased from 18.64% to 14.22%. These reductions suggest that
while P&G was expanding its asset base and market presence, it faced challenges in
maintaining high profitability levels, possibly due to integration costs and competitive
pressures.
• Earnings Variability: The Basic Earnings Per Share (EPS) showed fluctuations,
decreasing from Rs. 133.31 in 2017 to Rs. 115.40 in 2018, before rebounding to Rs.
129.12 in 2019. This variability reflects the dynamic nature of earnings during periods
of significant corporate restructuring and integration.
• Operational Efficiency: The Asset Turnover Ratio experienced a decline from
200.01% in 2017 to 172.25% in 2018 but showed a slight recovery to 180.57% in
2019. This pattern indicates initial challenges in asset utilization post-mergers, with
signs of improvement as integration processes matured.
Strategic and Market Position Enhancements
The acquisitions collectively contributed to P&G's strategic objectives in several ways:
1. Product Portfolio Diversification:
o Merck KGaA’s Consumer Health Business: This acquisition bolstered
P&G's over-the-counter (OTC) product lineup, adding renowned brands and
expanding its healthcare segment.
 o First Aid Beauty (FAB): Integrating FAB's sensitive skin products allowed
P&G to cater to niche consumer needs, aligning with trends favoring
specialized skincare solutions.
o Native Co: Known for environmentally friendly products, Native Co's
integration enabled P&G to tap into the growing market of eco-conscious
consumers.
o Walker & Company: With brands like Bevel and FORM, this merger allowed
P&G to address the specific grooming and beauty needs of people of color,
enhancing its inclusivity and market reach.
2. Geographical Expansion:
o The acquisitions, particularly of Merck’s Consumer Health Business and First
Aid Beauty, expanded P&G's presence in Europe, Asia, and other emerging
markets. Leveraging the acquired companies' existing market footprints and
P&G's extensive distribution network facilitated deeper penetration into these
regions.
3. Market Competitiveness:
o By integrating innovative and specialized brands, P&G fortified its
competitive edge against both established players and emerging niche
companies. These strategic moves helped P&G maintain relevance in a rapidly
evolving consumer goods landscape.
4. Leadership and Innovation:
o Retaining key leadership from acquired companies, such as Uta Kemmerich-
Keil from Merck and Lili Gordon from FAB, ensured continuity in brand
vision and innovation. This approach fostered a culture of innovation within
P&G, essential for sustaining growth and adapting to market trends.
Current Standing of Procter & Gamble
As of 2023, Procter & Gamble stands as a robust leader in the global consumer goods
industry. The company’s strategic acquisitions between 2013 and 2023 have substantially
contributed to its current stature:
• Market Presence: P&G operates in over 180 countries, with a diversified product
portfolio that spans beauty, grooming, health care, fabric & home care, and baby,
feminine & family care. The integration of acquired brands has enriched this
portfolio, enabling P&G to cater to a wide array of consumer preferences.
• Financial Performance: P&G has demonstrated resilience in its financial
performance. Despite the initial challenges post-acquisitions, the company has
managed to stabilize and grow its earnings. Continuous improvements in operational
efficiency and cost management have contributed to sustaining profitability.
 • Innovation and Sustainability: Emphasizing innovation, P&G has invested in
research and development to introduce new products and improve existing ones. The
company's commitment to sustainability is evident through its focus on
environmentally friendly products and practices, aligning with global consumer
trends.
• Consumer Engagement: P&G's strategic focus on understanding and meeting
diverse consumer needs has reinforced its brand loyalty. By addressing niche markets
and promoting inclusivity, the company has strengthened its connection with a
broader consumer base.
In summary, Procter & Gamble's mergers and acquisitions over the past decade have been
instrumental in enhancing its market position, diversifying its product offerings, and
expanding its global reach. While the company faced typical integration challenges post-
mergers, its strategic approach to retaining brand identities, leveraging leadership, and
focusing on innovation has yielded positive outcomes. As of 2023, P&G continues to thrive
as a dynamic and adaptive leader in the consumer goods sector, well-positioned to navigate
future market challenges and opportunities.
Graphs and financials
1.Share Price of the company for the last 10 years

2.Simplified Balance Sheet for last 10 years

3.Cash flow for the last 10 years

4. Shareholding Pattern
5. Profit and Loss for the last 10 years

6.Peer Comparison
Bibliography
• finance.yahoo.com
• https://www.screener.in/
• https://www.moneycontrol.com/
• https://tracxn.com/
• www.nseindia.com