Jan 28, 2005 (10:01 AM EST)
Procter & Gamble To Buy Gillette For $57 Billion

Read the Original Article at InformationWeek

Procter & Gamble Co.'s $57 billion deal to acquire Gillette Co., revealed Friday, might be good for consumers and investors, but it's not clear how well it will serve some of the two companies' more aggressive IT initiatives, including radio-frequency identification and global data synchronization.

Both are heavily involved in RFID projects with Wal-Mart, Metro Group, Tesco, and Target, which could get pushed aside amid the more mundane merger and acquisition challenges, such as combining accounting and back-office functions to eliminate redundancies and gain economies of scale to pay for the acquisition. The two likely will also have to integrate ERP and other enterprise systems. Procter & Gamble couldn't comment by press time.

But the difficult task of integrating two IT infrastructures may not be enough to halt the RFID and data-sync initiatives, which are largely driven by retailers' mandates, analysts say. "They will have to move forward with compliance efforts already under way with retailers to maintain commitments with mandates for global data synchronization and RFID," says Gene Alvarez, VP of technology research at Meta Group. "Retailers are not going to tell suppliers that because they made a merger there is an extension on deployments."

Others say P&G and Gillette aren't likely to slow strategic IT projects because they understand how critical IT innovation is to staying competitive, cutting costs, and boosting sales. The mega-acquisition is a positive move because both companies have cultures that understand technology. "The industry has really had to focus on innovation through product and services, and new customers experiences," says Christine Overby, principal analyst at Forrester Research. "Both companies have strong technology initiatives to gain customer insight, and now they have even more power to align themselves with key retailers."