Procter and Gamble (P&G) has operations in 41 countries and 126,000 employees, with annual sales of $84 billion. While these revenues are double that of its closest competitors, analysts and shareholders are beginning to wonder if the company might see faster growth if it split up.
1. What is the current stock price? What was the stock price a year ago?
2. What is P&G doing to make itself more attractive to investors? What is the company’s current PE ratio and how do you interpret it?
3. Bill Ackman acquired a $1.8 billion stake in P&G in June with the intent of forcing a shake up at the company. What percentage control is this?
4. What are the pros and cons of splitting the company? If you were a shareholder of P&G, what position would you support and why?
Bernard-Kuhn, L. and A. Coolidge. (2012). Is P&G Too Big? Weighing the Pros and Cons of Break-up, USA Today, August 19 (Retrievable online at http://www.usatoday.com/money/industries/story/2012-08-19/procter-gamble-growth/57134630/1)