No merger planned, says Colgate CEO

NEW YORK - Colgate-Palmolive Co. has no merger plans, longtime Chairman and Chief Executive Reuben Mark said at the company's annual meeting on Wednesday.  

Mark, who has run Colgate for two decades, said that business is quite good despite higher material costs and competitive spending. 

The question of merger possibilities comes as one of Colgate's main competitors, Procter & Gamble Co., gets ready to acquire another, Gillette Co., in a deal expected to close this fall. 

"We have absolutely no plans, no discussions, no interest in that," Mark said when queried about a merger. "There is nothing going on." 

Mark, 66, was also asked by a couple of shareholders whether he had any plans to retire.  

Colgate, which makes products including its well-known toothpaste, Speed Stick deodorant and Ajax cleaner, said last week that President William Shanahan, 65, plans to retire in the third quarter.  

Upon his retirement, Chief Operating Officer Ian Cook, 52, will become president. Many see that as a signal that Cook could step in as CEO when Mark decides to retire.  

Mark, who became chief executive in 1984 and added the role of chairman in 1986, jokingly replied to one shareholder that he and Shanahan had decided they would "retire precisely at the appropriate time and not before or after. "  

Hundreds of shareholders, including several dozen Colgate retirees, trek to New York each spring for the company's annual meeting. Several said they want Mark to stay.

Companies such as Colgate are grappling with the impact of higher oil prices and raw material costs. 

Mark said material costs were 3.7 per cent higher in 2004 than a year earlier. From 1999 to 2002, material costs fell each year, but they have risen since 2003, he said. 

Last week, New York-based Colgate-Palmolive posted an 11 per cent drop in quarterly profit due to restructuring charges.  

The company, which also makes Palmolive cleansers and Hill's pet foods, issued its first earnings warning in nearly a decade in September, due in part to higher costs for raw materials. In December, it outlined plans to cut about 4,400 jobs and shut some plants as it battles rising costs and focuses on higher-profit areas, such as oral care. 

Colgate's proposals, including the election of board members, a revised employee stock option plan and nonemployee director stock option plan, were approved by shareholders. A shareholder proposal regarding executive compensation was defeated.  

Shares of Colgate rose 12 cents to $49.97 in afternoon trading on the New York Stock Exchange. The shares were at about $59.00 a year ago, and reached a 52-week high of $59.04 in June.  

- REUTERS