P&G ACQUIRES GILLETTE FOR $57 BILLION
Deal Would Create World's Largest Consumer Products Company
The court yesterday found Gillette’s claim that M3Power raises hair up and away from skin “unsubstantiated and inaccurate” and said Gillette must stop making the claim in ads and on packaging within 30 days.
A Gillette spokeswoman said the company already had ended the animated TV demo that was subject of the ruling weeks ago and removed the claims from new packaging.
2004 Super Bowl ad
Current TV advertising for M3Power is a modified version of the ad that first ran on the 2004 Super Bowl, continuing to promise “the world’s best shave,” adding a cameo from British soccer star David Beckham and subtracting the claim “It’s like having an angel by your side.”
Omnicom Group’s BBDO Worldwide, New York, handles creative. WPP Group’s MindShare, New York, has the media portion of the account.
The Gillette spokeswoman said while the company is disappointed by the preliminary injunction, it hasn’t yet decided whether to appeal. The visual in question “isn’t a core part of the television commercial,” she said.
Gillette launched Venus Vibrance, a similar vibrating razor for women, this spring without the hair-raising claim, instead claiming it “gently exfoliates” dry skin.
Seeking punitive damages
A spokeswoman for Energizer, owner of Schick, said the company will use the false-advertising determination to bolster its case for punitive damages against Gillette when the case goes to trial, currently set for later this year. She said Energizer is seeking compensatory damages based on loss of market share for Schick and punitive damages based on Gillette’s profits from the M3 Power.
M3 Power currently ranks as the top-selling new product in home and personal care in the past 12 months, according to Information Resources Inc. Schick’s share of the $200 million razor-handle category fell 9.6 points to 23.4% in the first quarter while Gillette’s rose 10.6%, largely on the strength of the launch, according to IRI figures from Deutsche Bank. But Schick’s share of the bigger and more profitable refill blade category was still up 1.1 points to 13.4% as it continued to benefit from the 2003 launches of four-bladed Quattro and its women’s Intuition brand.
Gillette’s pending acquisition by Procter & Gamble Co. is due for a vote by shareholders of both companies next month and remains under antitrust review by the U.S. Federal Trade Commission and European Union. The Massachusetts secretary of state’s office, which is investigating whether the $57 billion deal is unfair to Gillette shareholders, deposed Gillette's chairman-CEO, Jim Kilts, yesterday for six hours.