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This Day In Market History: Gillette Buys Duracell

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This Day In Market History: Gillette Buys Duracell

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened

On this day 22 years ago, Gillette bought Duracell for $7 billion.

Where The Market Was

The Dow Jones Industrial Average closed at 5,838.52 and the S&P 500 traded at 680.54. Today, the Dow is trading at 25,998.92 and the S&P 500 is trading at 2,888.92.

What Else Was Going On In The World

In 1996, a bomb exploded at the Summer Olympics in Atlanta. DVDs were launched in Japan. Average monthly rent was $554.

Gillette’s Duracell Blunder

When Gillette announced it was buying Duracell for $7 billion in stock in September 1996, Gillette’s share price was hovering around $61. At the time of the deal, Gillette was making a push to become a diversified consumer products company, but the Duracell deal didn’t exactly work out as planned.

After the diversification strategy failed to bear fruit, Gillette itself was acquired by Procter & Gamble Co (NYSE: PG) in 2005 in a deal worth roughly $54 per Gillette share at the time.

In 2014, nearly two decades after Gillette paid $7 billion for Duracell, Berkshire Hathaway, Inc. (NYSE: BRK-A) (NYSE: BRK-B) bought Duracell from Procter & Gamble at a roughly 50-percent discount to Gillette’s 1996 price. The sale was part of Procter’s initiative to shed its slower-growing brands and focus on roughly 80 core brands.

As of 2016, Duracell generated an annual revenue of roughly $2 billion.

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