FTC seeks more information in review of P&G, Gillette deal

The Federal Trade Commission requested additional information in connection with its review of Procter & Gamble Co.'s proposed $57 billion acquisition of Boston shaving giant Gillette Co.

The companies said yesterday they plan to cooperate fully with the FTC's request and continue to expect the deal to close this fall. They declined to detail what information regulators sought. As a matter of policy, the FTC does not comment on ongoing reviews.

''It is not at all unusual in a transaction of this size to get a second request for information," said Gillette spokesman Eric Kraus. Such a request ''was expected," added Linda Ulrey, a spokeswoman for P&G, a Cincinnati consumer products firm.

Analysts and lawyers said the request did not strike them as out of the ordinary. Though P&G and Gillette overlap in only a few product areas -- namely toothbrushes, whitening toothpastes, and deodorant, their merger would create the world's largest consumer products company. Of its many brands, the merged company would have 21 from Mach3 razors to Tide laundry detergent that each generate at least $1 billion a year in sales.

Thomas N. Talley, a lawyer at New York firm Thacher Proffitt & Wood, who specializes in mergers and acquisitions, said he would expect that fact alone to trigger a rigorous review by regulators to ensure competition is not squelched and consumers are not harmed.

''The list of factors regulators look at is long and varies with every transaction," Talley said. ''What's the market share, how strong is the competition, what's the ease of entry into that market?"

State regulators are also scrutinizing P&G's proposed acquisition of Gillette. Secretary of State William F. Galvin said earlier this week Gillette may be worth up to $72 billion, $15 billion more than what P&G is proposing to pay for the Boston company, according to a review of internal company documents by his office.

He said the new numbers also raise further questions about the motives of Gillette chairman and chief executive James M. Kilts in selling the company. Kilts will receive $11 million to stay on at P&G for a year after the merger as part of a total package that an executive compensation firm calculated to be worth $173 million.

Galvin yesterday declined to comment on the FTC seeking additional documents from Gillette and P&G.

The deal is expected to result in about 6,000 layoffs, or about 4 percent of the combined companies' workforce. But the companies have yet to detail where those reductions would come.

Once the companies fully comply with the request, the FTC will have 30 days to make a decision in the case. The commission could decide to allow the acquisition, require the companies to divest certain assets before merging, or seek to prevent the proposed deal.

With brands like Tide laundry detergent, Olay skin care products, Pampers diapers, and Bounty paper towels, P&G does not directly overlap with Gillette's businesses in razors and batteries. Last year, blades and razors accounted for 42 percent of Gillette's sales and 63 percent of its profits, while its Duracell battery business accounted for 21 percent of sales and 19 percent of profits, according to Gillette.

The companies, however, do compete in the oral care segment with Gillette's Oral-B toothbrushes and Rembrandt whitening toothpastes going head to head with P&G's Crest products. Gillette's Oral-B business accounted for 15 percent of the company's sales and 10 percent of its profits last year.

But the competition from Colgate-Palmolive Co., Unilever, and other consumer products companies remain strong in those categories, said William Chappell, an analyst with SunTrust Robinson Humphrey in Atlanta. And even if regulators asked Gillette to divest its Right Guard deodorant or Rembrandt lines before merging, Chappell said those brands are relatively small for the companies.

''There's very little antitrust issues that I would expect," Chappell said.

P&G shares fell 69 cents to $52.05.

Naomi Aoki can be reached at naoki@globe.com.