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Merger & Acquisition

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PROCTOR & GAMBLE AND WELLA AG

a. Discuss measurements that management planned to use to measure success
of the deal.

b. How can you determine whether or not the anticipated benefits were
realized?

C. The behavior of the stock of both companies after the deal was
announced.
*Why the acquirING company's stock rose or fell after the dea
was announced?
*Why the acquirED company's stock rose or fell after the deal
was announced?

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Solution Summary

Discuss measurements that management planned to use to measure success
of the deal.

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a. Discuss measurements that management planned to use to measure success of the deal.

The prima facie reason for P&G's acquisition of Wella was to expand its presence in the beauty salon business as well as in the European and Latin American market. Hence, the obvious measurement tool to measure success of the deal was growth in top line revenues in the beauty salon segment as well as growth in revenue and market share in European and Latin American market.

Apart from growth in top line growth and market share, other important measurements include improvement in bottom line profitability due to increased sales as well as potential synergies due to the combined capabilities, operational and marketing strengths and management/Human resource base of the two companies.

As per the company's top brass, the ...

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