P&G CEO Crushes Rumors of Company Breaking Up
The Procter & Gamble Company (PG), a Dow 30 component, supplies branded consumer packaged goods to consumers across the globe.
Recent changes within the organization have sparked rumors of a potential breakup of Proctor & Gamble. CEO David Taylor shut down the rumors stating, “No. The company gets tremendous value on being one company P&G as a company can accomplish more than any one of the individual categories can.”
Earlier in the month, P&G said it will split up into six business units from the current 10. It is believed that the overhaul will help the company develop new products at a quicker pace.
The shakeup of the company’s structure could come as a result of new board member Trian Partners’ Nelson Peltz, who released a 93-page white paper arguing against Proctor & Gamble’s “insular” culture and its sluggishness in acquiring upstart brands. Peltz’s paper also suggested splitting P&G up into three business segments.
P&G’s shares have climbed 27% in the past three months, seemingly kick-started by signs of sales momentum in the most recent quarter.
“We expect investors to broadly embrace P&G’s new organization structure, but they will likely remain skeptical until further evidence of improvement is seen.” -Wells Fargo analyst Bonnie Herzog
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