Charles River Associates Team Aids in Smoothing the Way for P&G-Clairol Merger; Veteran Antitrust Economists Assure Regulatory Authorities on Key Issues.

Business Editors

BOSTON--(BUSINESS WIRE)--Dec. 4, 2001

Charles River Associates Incorporated (Nasdaq: CRAI), an internationally known leader in providing economic, financial, and management consulting services, today announced that a senior team of the firm's consulting experts, led by Professor Steven Salop, provided critical economic and antitrust analysis that helped to pave the way for Procter & Gamble's acquisition of Clairol, recently cleared by the U.S. Department of Justice (DOJ).

The $4.95 billion transaction, which transfers control of Clairol from its former parent company, Bristol-Myers Squibb, will permit Procter & Gamble (P&G) to integrate Clairol's $1.6 billion hair care, hair color, and personal care business within P&G's own Global Beauty Care business unit. Besides the U.S. DOJ, regulatory agencies clearing the acquisition worldwide included those in Canada, the United Kingdom, Mexico, Spain, and Germany.

The CRA team focused specifically on the question of whether combining the companies' product lines (e.g., Pantene and Herbal Essences) would lead to any significant "anticompetitive unilateral effects" for hair care product consumers. In the Horizontal Merger Guidelines jointly issued by the DOJ and the Federal Trade Commission, the unilateral effects standard focuses antitrust attention on any merger of product lines that might unite two brands that are close substitutes for one another. The analysis must evaluate whether the combined firm would have an incentive to raise the price for either or both products as a result of the merger-related reduction in competition.

According to Salop, who is Professor of Economics and Law at the Georgetown University Law Center as well as a senior consultant to Charles River Associates, "We used economic theory and empirical analysis to explain why U.S. hair care markets would not become less competitive after the P&G-Clairol transaction is consummated." Joe Sims of Jones, Day, Reavis & Pogue, who was lead counsel for P&G in the transaction, observed that "CRA's role in this case was pivotal to its successful outcome. The firm consistently provides sound, reliable economic analysis."

Commenting on CRA's role in the successfully completed transaction, James C. Burrows, President and CEO of Charles River Associates, stated, "This kind of in-depth and objective economic analysis is one of CRA's core competencies. Both private firms and regulatory agencies frequently consult our seasoned experts in economics, finance, and antitrust to gain unique insights into the often complex effects that a significant event, such as the P&G-Clairol combination, is likely to have on markets, lines of business, and the ultimate consumer."

About CRA

Charles River Associates, an economics, finance, and business consulting firm, works with businesses, law firms, accounting firms, and governments in providing a wide range of services. CRA combines economic and financial analysis with expertise in litigation and regulation support, business strategy and planning, market and demand forecasting, policy analysis, and engineering and technology management. CRA is distinguished by a corporate philosophy of providing responsive, top-quality consulting; an interdisciplinary team approach; unsurpassed economic, financial, and other analytic skills; and pragmatic business insights. In addition to its corporate headquarters in Boston and international offices in London, Melbourne, Mexico City, Toronto, and Wellington, CRA also has U.S. offices in Berkeley/Oakland, College Station, Los Angeles, Palo Alto, Salt Lake City, and Washington, D.C. More information about the Company can be found on its Web site at www.crai.com.

Statements in this press release concerning CRA's involvement in the Procter & Gamble-Clairol combination are "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties. Information contained in these forward-looking statements is inherently uncertain, and actual performance and results may differ materially. Such factors that could cause actual results to differ materially from any forward-looking statements made by the Company include, among others, acquisition costs, dependence on key personnel, attracting and retaining qualified consultants, dependence on outside experts, intense competition, and professional liability. Further information on factors that could affect the Company's financial results is included in the Company's filings with the Securities and Exchange Commission.