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Procter & Gamble (P&G), the number one US consumer goods company, and Gillette, the world''s largest manufacturer of shaving products, announced the merger of their operations in January 2005. The US$57 billion merger was the ninth-largest in US corporate history. Post-merger, the new company would dethrone Unilever as the world''s largest producer of consumer goods and is expected to have bargaining power rivaling that of global retailers like Wal-Mart and Carrefour. The merger, scheduled to be complete in late 2005, is expected to reap cost synergies of up to US$22 billion for the new company. But the problems encountered by Daimler-Chrysler and Hewlett Packard-Compaq''s mergers showed that size could be a potential hindrance to the success of a merger. This case study facilitates in discussing the potential synergies that P&G can gain from the merger and the problems it is likely to face in the course of the merger''s successful execution. A structured assignment ''305-240-4'' is available to accompany this case.