$57b Gillette deal overwhelmingly OK'd

WILMINGTON, Del. -- Shareholders of Gillette Co. and Procter & Gamble Co. yesterday overwhelmingly backed the $57 billion deal to make one of the world's largest consumer products giants even bigger.

More than 96 percent of the ballots cast by shareholders from both companies favored P&G's bid to buy the century-old Boston shaving firm, which is expected to close this fall. Many voted by mail, but some Gillette shareholders showed up to vote at a meeting here while P&G shareholders voted at a meeting at the company headquarters in Cincinnati.

The transaction still requires clearance from US and European regulators, but yesterday's approvals push the deal one step closer, making Gillette the latest in a spate of signature Boston companies to be purchased by bigger out-of-state firms.

The Gillette acquisition -- the biggest one in P&G's history -- will marry some of the world's best known brands, including P&G's Tide detergent, Crest toothpaste and Pampers diapers, with Gillette's razors and Oral B toothbrushes. The combined company is projected to have annual sales totaling $65 billion.

''The huge vote in favor of the merger -- 96 percent of the votes cast -- validates what we have said from the start. This combination of two great companies is a unique opportunity to create the best consumer products company in the world," Gillette chief executive James M. Kilts said yesterday. ''And the price is both attractive and fair to Gillette shareholders."

In a statement, P&G chief executive A.G. Lafley praised the deal, saying ''the combination will enable us to leverage each company's strengths to drive more consistent and stronger consumer and shareholder value over the long term."

At Gillette's meeting, at a hotel with only 18 shareholders attending, Kilts came under attack for the $165 million compensation package that he stands to receive from the deal.

''We are getting a pittance, while the executives are getting $200 million," said Marjorie Francis, a 73-year-old Somerville resident who voted against the acquisition. ''Shareholders are getting the shaft."

Kilts, in an interview after the meeting, said he makes ''no apologies" for the compensation and that it is performance-based. He lauded the deal, which is under investigation by Massachusetts Secretary of State William F. Galvin, as bringing value to Gillette shareholders. Kilts said the transaction preserves the shaving firm's traditions while allowing the company to maintain a major presence in Boston and Massachusetts.

Gillette's shaving business will continue to be run out of Boston as a separate business unit by Kilts. But the company's nearly $1 billion personal-care line, including Right Guard and its dental care products, will be folded into larger subsidiaries of P&G. The acquisition will result in about 6,000 job cuts from a combined company workforce of 140,000.

After yesterday's voting, Galvin said he will continue his investigation into whether Gillette was undervalued. ''It wasn't a good deal for Massachusetts," he said. ''We're going to lose economic clout and jobs."

P&G shares rose four cents to close at $53.94 on the New York Stock Exchange, while Gillette shares gained seven cents to $51.70.

Jenn Abelson can be reached at abelson@globe.com.