1) Before the offer for Gillette was announced (i.e., at the close of trade on 1/26/2005), P&Gs stock price was $55.44, and the firm had 2,522.583 million shares outstanding (fully diluted). If the proposed merger produced ZERO synergy, what would happen to P&Gs stock price after the merger is completed?

• Given: Gillettes stock price at the close of trade on 1/26/2005 was $45, with 1,068.379 million shares outstanding and had an implied offer for its stock price at $54.05
• Given the price of the Gillette acquisition is $57.177 billion, its share price at the close of trade 1/26/2005 is $45 and the firm has 1,068.379 million shares outstanding the exchange ratio offer for Gillette is 0.975.