Reply #2: P&G to Buy Gillette for $57 Billion

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NEW YORK (Reuters) - Procter & Gamble Co. (PG.N: Quote, Profile, Research) on Friday said it would buy Gillette Co. (G.N: Quote, Profile, Research) for $57 billion in stock, uniting two iconic U.S. producers of household goods ranging from Pampers diapers to Duracell batteries.

The combined company would boast more than $60 billion in annual revenue, giving it increased leverage at stores ranging from discounters to grocers.

The deal values Gillette, best known for its razors, at $53.94 per share, an 18 percent premium to its Thursday closing stock price.

"That is a hell of a big deal and it gets people thinking that Unilever or others could go back on the acquisition trail," said one dealer in Paris, adding that Bic would be an obvious target. Colgate-Palmolive Co. (CL.N: Quote, Profile, Research) might eye Reckitt, traders said.

European Union antitrust chief Neelie Kroes said she expected to review the P&G-Gillette deal, which also need approval from U.S. regulators.

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7466828