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Procter & Gamble Company (PG) Incurs 3.5B Charge Related to 2005 Gillette Acquisition Case
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- On December 5, 2023, Procter & Gamble (PG) disclosed to the SEC incurrence of the total of $3.5B charges related to its 2005 acquisition of Gillette and restructuring of operations in several markets.
- On it, $PG fell 3.49%, losing $12.47B+ of shareholder value.
- Investors may have grounds to suspect Procter & Gamble of hiding important financial information, which led to their losses.
On December 5, 2023, P&G disclosed in a filing with the SEC that the Company will incur up to $2.5B in charges related to its 2005 acquisition of Gillette and restructuring of operations in several markets.
P&G further advised that it anticipates a $1B after-tax non-cash impairment charge during the quarter to adjusts the carrying value of the Gillette indefinite-lived intangible asset acquired as part of its Gillette acquisition, to fair value. According to P&G, the impairment charge arises from:
- reduction in the estimated fair value of the Gillette indefinite-lived intangible asset due to a higher discount rate,
- weakening of several currencies relative to the U.S. dollar and
- the impact of the restructuring program described above.
P&G further advised that future adverse changes in the business or macroeconomic environment may trigger a further impairment charge.
On this news, $PG fell 3.49% and lost over $12.47 billion of its market capitalization, seriously damaging shareholders.
Considering all the information, investors might have grounds to suspect Procter & Gamble of concealing important financial information on Gillette acquisition, which led to their losses.
The case is already under investigation by at least one of the reputable law firms.
Failure to Disclose,
Shock Event Date
05 December 2023