Gillette Cuts Off Purchase of Wilkinson’s U.S. Unit

Gillette Co. said Monday that it would not go through with its previously announced purchase of the U.S. operations of rival Wilkinson Sword Inc., bowing to government concerns that the acquisition would undercut competition in the razor blade business. However, Gillette said it would still go through with its planned acquisition of a non-voting interest in Wilkinson’s large European business.

In settling an antitrust suit filed by the government, Gillette, which has half of the U.S. razor and razor blade market, agreed not to buy Wilkinson’s U.S. business. Gillette said it decided to settle the case to avoid the time and expense of a lengthy trial.

The Department of Justice filed suit in January against Boston-based Gillette, alleging that the purchase “would eliminate one of only four other suppliers of blades and further increase Gillette’s dominant share.”

In December, Gillette said it planned to invest $155 million in a deal that would give it a substantial stake in Wilkinson, which holds 3% of the U.S. razor market. The overall deal was previously valued at $600 million.