DURACELL INTERNATIONAL INC, S-3/A, 1995-03-14

DURACELL INTERNATIONAL INC
S-3/A, 1995-03-14
MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 14, 1995

REGISTRATION NO. 33-57857
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--------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT N0. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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DURACELL INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 3692 06-1240267
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or
organization)
</TABLE>

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BERKSHIRE CORPORATE PARK
BETHEL, CONNECTICUT 06801
(203) 796-4000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

GREGG A. DWYER
SENIOR VICE PRESIDENT AND SECRETARY
DURACELL INTERNATIONAL INC.
BERKSHIRE CORPORATE PARK
BETHEL, CONNECTICUT 06801
(203) 796-4158

(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------
COPIES TO:
<TABLE>
<S> <C>
VINCENT PAGANO, JR., ESQ. RAYMOND Y. LIN, ESQ.
SIMPSON THACHER & BARTLETT LATHAM & WATKINS
425 LEXINGTON AVENUE 885 THIRD AVENUE
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10022
(212) 455-2000 (212) 906-1200
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF SECURITIES TO THE
PUBLIC: As soon as practicable after this Registration Statement becomes
effective.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. / /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
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CALCULATION OF REGISTRATION FEE
<TABLE><CAPTION>
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share.......... 4,600,000 shares $42 1/8 $ 193,775,000 $ 66,819.43 (3)
</TABLE>

(1) Does not include 11,500,000 shares included in previous filing.

(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 of the Securities Act of 1933, on the basis of the average of
the high and low prices of the Common Stock on the New York Stock Exchange
Composite Tape on March 9, 1995.

(3) $166,800.74 has been previously paid for shares included in previous filing.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

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<PAGE>
EXPLANATORY NOTE

This Registration Statement contains two separate prospectuses. The first
prospectus relates to a public offering in the United States and Canada of an
aggregate of 11,200,000 shares of Common Stock (the "U.S. Offering"). The second
prospectus relates to a concurrent offering outside the United States and Canada
of an aggregate of 2,800,000 shares of Common Stock (the "International
Offering" and, together with the U.S. Offering, the "Offerings"). The
prospectuses for the U.S. Offering and International Offering will be identical
with the exception of the following alternate pages for the International
Offering: a front cover page, a "Certain U.S. Tax Considerations Applicable to
Non-U.S. Holders of the Common Stock" section, an "Underwriting" section and a
back cover page. Such alternate pages appear in this Registration Statement
immediately following the complete prospectus for the U.S. Offering.

<PAGE>

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MARCH 14, 1995

PROSPECTUS
----------

14,000,000 SHARES
DURACELL INTERNATIONAL INC.
COMMON STOCK
-------------------

Of the 14,000,000 shares of Common Stock offered, 11,200,000 shares are
being offered hereby in the United States and Canada and 2,800,000 shares are
being offered in a concurrent international offering outside the United States
and Canada. The price to the public and the aggregate underwriting discount per
share are identical for both Offerings. See "Underwriting."

All 14,000,000 shares of Common Stock offered are being sold by the Selling
Stockholders. None of the officers of the Company are selling any shares in the
Offerings. The Company will not receive any of the proceeds from the sale of the
shares of Common Stock offered hereby. See "Principal and Selling Stockholders."

The Common Stock is listed on the New York Stock Exchange under the symbol
"DUR." On March 13, 1995, the last reported sale price of the Common Stock on
the New York Stock Exchange was $42 1/4.

-------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) SELLING STOCKHOLDERS
<S> <C> <C> <C>
Per Share.................................. $ $ $
Total(2)................................... $ $ $
</TABLE>

(1) The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities under the Securities Act of
1933. See "Underwriting."

(2) The Selling Stockholders have granted the U.S. Underwriters and the
International Underwriters 30-day options to purchase up to 1,680,000 and
420,000 additional shares of Common Stock, respectively, to cover
over-allotments. If these options are exercised in full, the total Price to
Public, Underwriting Discount, and Proceeds to Selling Stockholders will be
$ , $ and $ , respectively. See "Underwriting."

-------------------

The shares of Common Stock are being offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to approval of certain legal matters by counsel for the Underwriters. The
Underwriters reserve the right to withdraw, cancel or modify such offer and to
reject orders in whole or in part. It is expected that delivery of the shares of
Common Stock will be made in New York, New York on or about March , 1995.

-------------------

MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
CS FIRST BOSTON
SALOMON BROTHERS INC

-------------------

The date of this Prospectus is March , 1995.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
<PAGE>
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). The Registration Statement of which this
Prospectus forms a part, as well as reports, proxy statements and other
information filed by the Company, may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's regional
offices at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, New York, New York 10048. Copies of
such material can be obtained at prescribed rates from the Public Reference
Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Reports and other information concerning the Company can
also be inspected at the office of the New York Stock Exchange, 20 Broad Street,
New York, New York 10005.

The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933 (the "Securities
Act") with respect to the Common Stock being offered pursuant to this
Prospectus. This Prospectus does not contain all information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. The Registration Statement may be
inspected and copied at the public reference facilities maintained by the
Commission at the addresses set forth in the preceding paragraph. Statements
contained herein concerning the provisions of any documents are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such reference.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The following documents, which have been filed with the Commission, are
hereby incorporated by reference:

1. Annual Report on Form 10-K of the Company for the fiscal year ended
June 30, 1994;

2. Quarterly Reports on Form 10-Q of the Company for the quarterly
periods ended October 1, 1994 and December 31, 1994; and

3. The description of Common Stock contained in the Company's
registration statement filed pursuant to the Exchange Act, and any amendment
or report filed for the purpose of updating such description.

All documents filed by the Company after the date of this Prospectus
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the completion of the offerings being made hereby, shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statements as modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.

The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request of such person, a
copy of any or all of the documents referred to above which have been or may be
incorporated by reference in this Prospectus (other than certain exhibits to
such documents). Requests for such documents may be made by writing Duracell
International Inc., Berkshire Corporate Park, Bethel, Connecticut 06801
(Attention: Vice President, Investor Relations) or by calling (203) 796-4364.

IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SHARES OFFERED
HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE>
THE COMPANY

Duracell International Inc. ("Duracell" or the "Company") is the world's
leading manufacturer and marketer of high-performance alkaline batteries.
DURACELL batteries are sold throughout the world, primarily under the
DURACELL(R) trademark. DURACELL is the best-selling alkaline battery brand in
the world.

Duracell has experienced 21 consecutive years of sales increases, due in
large part to the expanding market for its principal product, alkaline
batteries. In fiscal 1994, Duracell manufactured and sold approximately 2.4
billion alkaline batteries. Management believes that the alkaline segment of the
consumer battery market provides significant future growth opportunities.
Alkaline batteries represent an estimated 33% of the batteries sold in the
consumer markets where Duracell does business, and have steadily increased their
share of the consumer battery market.

Alkaline batteries represent an estimated 85% of the U.S. consumer battery
market. The U.S. alkaline battery market continues to grow as a result of the
large and growing installed base of battery-powered consumer devices and a
continued consumer shift toward alkaline batteries, which provide considerably
longer service life than traditional zinc carbon batteries.

The DURACELL brand is the leading alkaline battery brand in Europe, where
alkaline batteries represent only an estimated 50% of the consumer battery
market in the combined areas of Western and Eastern Europe (excluding Russia).
Management believes that Duracell's strong market share in Western Europe,
combined with the opening of markets in Eastern Europe, where Duracell has
established offices in Poland, Hungary and the Czech Republic, leaves Duracell
well positioned for future growth in Europe.

The Company has experienced significant growth in Other International
Markets, which consist of certain Latin American, South American, Caribbean,
Middle East, African, Pacific Rim and various other developing alkaline markets.
Over the past several years Duracell has also begun expanding into China and
India, two of the world's largest battery markets. These markets, which have a
combined annual consumption of about five billion of mostly poor quality zinc
carbon batteries, also offer potential for additional significant growth. Entry
into these markets has been through majority owned joint ventures which will
build manufacturing facilities with construction to commence prior to the end of
1995. Although Duracell has achieved a high alkaline share in numerous countries
included in Other International Markets, overall alkaline sales as a percentage
of total battery sales (estimated at 15%) is low as compared to zinc carbon
battery sales. Management believes that Duracell is well positioned for
continued growth in Other International Markets and that these markets have
significant potential for continued alkaline penetration.

Unlike most of its competition, Duracell markets consumer batteries
worldwide under a single brand name. Duracell distributes its products through
more than 500,000 retail locations, ranging from mass merchandisers to small
photo outlets, and supports its sales with extensive advertising and sales
promotion campaigns. In addition, Duracell markets lithium batteries, zinc air
batteries, and a range of other specialty batteries, including nickel metal
hydride rechargeable batteries for use in high-power consumer devices such as
laptop computers, cellular phones and other consumer electronic devices.

As part of its growth strategy, Duracell reviews battery related
acquisitions, joint venture opportunities and new battery technologies.
Consistent with this approach, Duracell entered the high power rechargeable
battery market in August 1992 with a Technical Cooperation Agreement with
Toshiba Battery Co., Ltd. and Varta Batterie A.G. for the purpose of engaging in
joint research and development of nickel metal hydride rechargeable cells. The
agreement has a five year term, and each company has the right to use any
technological developments emanating from their joint efforts. In October 1994
affiliates of Duracell, Toshiba and Varta formed a joint venture for the purpose
of manufacturing nickel metal hydride cells in the United States. Duracell's and
Toshiba's affiliates each hold a 40% interest in the joint venture and Varta's
affiliate has a 20% stake. Construction of the manufacturing facility is

3
<PAGE>
expected to begin prior to the end of 1995. Duracell also plans to begin
manufacturing lithium ion high power rechargeable batteries initially in its
Waterbury, Connecticut facility prior to the end of 1996.

Duracell employs approximately 7,700 people, with 3,700 in North America,
2,200 throughout Europe and 1,800 in Other International Markets. Manufacturing
facilities are located in the United States, Canada, Mexico, the United Kingdom
and Belgium.

The Company was organized in 1988 at the direction of the private investment
firm of Kohlberg Kravis Roberts & Co., L.P. ("KKR") to acquire Duracell Inc. and
its battery-related subsidiaries and affiliates. The shares of the Company's
common stock (the "Common Stock") to be sold hereby in the United States and
Canada and international offerings (collectively, the "Offerings") are being
offered by limited partnerships affiliated with KKR (the "Selling
Stockholders"). Following the Offerings, assuming that the Underwriters'
over-allotment options are not exercised, approximately 36% of the Company's
Common Stock outstanding on a fully diluted basis will be held by the Selling
Stockholders.

The principal executive offices of the Company are located at Berkshire
Corporate Park, Bethel, Connecticut 06801; its telephone number is (203)
796-4000. Unless the context indicates otherwise, the terms "Duracell" and the
"Company" also include the subsidiaries of the Company.

PROCEEDS OF OFFERING

The Company will not receive any proceeds from the sale of Common Stock
offered hereby.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Common Stock is listed and traded on the New York Stock Exchange under
the symbol "DUR". The number of holders of record of Common Stock at January 28,
1995 was 6,085. The Company paid its initial quarterly cash dividend on the
Common Stock in the quarter ended September 1992 at the rate of $.08 per share.
Quarterly dividends were subsequently increased as indicated below. The Company
expects to continue paying cash dividends with a payout ratio in line with
comparable consumer products companies. The future payment of dividends,
however, remains subject to the discretion of the Board of Directors and
dependent upon the Company's results of operations, financial condition, cash
requirements and other relevant factors.

The following table sets forth the high and low sale prices for the Common
Stock for the calendar quarters indicated as reported by the New York Stock
Exchange Composite Tape and dividends paid in such quarters.

<TABLE>
HIGH LOW DIVIDENDS
------------ ------------ ---------
<S> <C> <C> <C>

1995:
First Quarter (through March 13, 1995)......... 43 3/4 36 3/4 $ .26*

1994:
Fourth Quarter.................................... 46 40 1/4 .22
Third Quarter..................................... 47 1/4 39 .22
Second Quarter.................................... 44 1/4 38 5/8 .22
First Quarter..................................... 44 1/4 36 .22

1993:
Fourth Quarter.................................... 37 7/8 32 1/4 .16
Third Quarter..................................... 38 1/8 28 1/2 .16
Second Quarter.................................... 36 27 1/4 .16
First Quarter..................................... 36 1/4 29 7/8 .16
</TABLE>

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* Payable on March 20, 1995 to holders of record on March 6, 1995.

The last reported sale price of the Common Stock on the New York Stock
Exchange as of a recent date is set forth on the cover page of this Prospectus.

4
<PAGE>
SELECTED FINANCIAL DATA

Set forth below is selected consolidated financial data of the Company at
and for each of the five fiscal years for the period ended June 30, 1994,
derived from financial statements of the Company which were audited by Deloitte
& Touche LLP, independent auditors. Also set forth below is selected financial
data of the Company at and for the six fiscal months ended December 31, 1994 and
December 25, 1993 which were derived from unaudited financial statements, which
financial statements, in the opinion of management, reflect all adjustments
necessary for a fair presentation of such data. The selected financial data for
each of the five fiscal years for the period ended June 30, 1994 should be read
in conjunction with the more detailed financial information included in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1994,
which is incorporated in this Prospectus by reference.

Because battery sales are seasonal, the Company's results for the first and
second quarters of its fiscal year historically have shown greater sales and
profits than those for the second half.
<TABLE>
<CAPTION>
SIX FISCAL MONTHS ENDED FISCAL YEAR ENDED JUNE 30,
---------------------------- ----------------------------------------------
DECEMBER 31, DECEMBER 25,
1994 1993 1994 1993 1992 1991 1990
------------- ------------- ------ ------------- ------ ------ ------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenue.................................. $ 1,222 $ 1,098 $1,871 $ 1,742 $1,617 $1,524 $1,335
Operating income before restructuring.... 287 255 356 307 285 256 226
Restructuring............................ -- -- -- (65)(1) -- -- --
Operating income......................... 287 255 356 242 285 256 226
Interest expense......................... 14 16 30 46 80 186 204
Income before extraordinary items and
accounting change..................... 164 143 200 124(1)(2) 167 41 6
Net income (loss)........................ 164 143 200 49(1)(3) 128(4) (34)(4) 6
Per share data:
Income before restructuring,
extraordinary items and accounting
change................................ 1.35 1.21 1.68 1.44 1.43 .50 .08
Income before extraordinary items
and accounting change................. 1.35 1.21 1.68 1.04(1) 1.43 .50 .08
Net income (loss)....................... 1.35 1.21 1.68 .41(1)(3) 1.09(4) (.42)(4) .08
Dividends............................... .44 .32 .76 .48 -- -- --
Weighted average shares and share
equivalents outstanding................ 121 119 119 119 117 82 73

<CAPTION>
JUNE 30,
DECEMBER 31, DECEMBER 25, --------------------------------------------------
1994 1993 1994 1993 1992 1991 1990
------------- ------------- ------ ------------- ------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets............................. $ 2,454 $ 2,157 $2,286 $ 1,998 $2,157 $2,054 $2,111
Working capital.......................... 462 295 379 203 216 148 141
Total debt............................... 418 452 406 505 734 923 1,449
Stockholders' equity..................... 1,249 1,116 1,154 982 1,008 716 264

</TABLE>

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(1) During the fiscal year ended June 30, 1993 organizational and manufacturing
restructuring actions were taken designed to capitalize on opportunities to
create a lower cost structure through functional efficiencies and optimal
use of global manufacturing resources. During 1994 the Company began
realizing the benefits of the actions taken. In North America, the Company's
global manufacturing strategy has been implemented, resulting in providing
Latin America and Asia Pacific operating units with lower cost, no added
mercury alkaline batteries. Streamlining in Europe resulted in cost savings
from the integration of sales, marketing, distribution and administrative
functions. The closure of the Brazilian manufacturing facility contributed
to the increased profitability of Other International Markets since lower
cost product is now sourced from the United States and Europe. The cash
outlays and equipment related write-offs related to the restructuring were
substantially complete as of June 30, 1994.

(2) Income before extraordinary items and accounting change for the fiscal year
ended June 30, 1993 was $171 million before the $47 million after-tax impact
of restructuring costs.

(3) Effective in the first quarter of fiscal year 1993, the Company adopted
Statement of Financial Accounting Standards ("FAS") No. 106, "Employers'
Accounting for Postretirement Benefits Other than Pensions" and recorded a
$75 million or $.63 per share after-tax one-time noncash charge for the
cumulative effect of adoption.

(4) During the fiscal years ended June 30, 1992 and 1991, the Company recorded
extraordinary losses of $39 million, or $.34 per share, and $75 million, or
$.92 per share, respectively, related to the Company's subordinated debt
repurchase program, which was completed in September 1991.

5
<PAGE>
FINANCIAL OVERVIEW

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
SIX FISCAL MONTHS ENDED
---------------------------- FISCAL YEAR ENDED JUNE 30,
DECEMBER 31, DECEMBER 25, ------------------------------------------
1994 1993 1994 1993 1992 1991 1990
------------- ------------- ------ ------ ------ ------ ------
(UNITS/$ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Alkaline unit volume................................... 1,592 1,416 2,437 2,196 1,978 1,842 1,706
Revenue................................................ $1,222 $1,098 $1,871 $1,742 $1,617 $1,524 $1,335
Cost of products sold.................................. 413 364 647 640 591 585 522
Advertising and promotion.............................. 285 261 428 357 327 305 265
R&D/Engineering........................................ 28 25 52 45 36 31 27
Other operating expenses............................... 209 193 388 393 378 347 295
----- ----- ------ ------ ------ ------ ------
Operating income before restructuring.................. 287 255 356 307(1) 285 256 226
Operating margin before restructuring.................. 23.5% 23.2% 19.0% 17.6(1) 17.6% 16.8% 16.9%
Restructuring.......................................... -- -- -- 65 -- -- --
----- ----- ------ ------ ------ ------ ------
Operating income....................................... 287 255 356 242 285 256 226
Operating margin....................................... 23.5% 23.2% 19.0% 13.9% 17.6% 16.8% 16.9%
Interest expense....................................... 14 16 30 46 80 186 204
Tax expense............................................ 106 92 120 59 44 24 13
Effective tax rate..................................... 39.2% 39.1% 37.5% 32.2% 20.9% 36.4% 69.1%
Income before extraordinary items and accounting
change................................................. 164 143 200 124 167 41 6
Earnings per share before restructuring, extraordinary
items and accounting change........................... 1.35 1.21 1.68 1.44 1.43 .50 .08
</TABLE>

------------
(1) Operating income before restructuring was reduced $11 million, and operating
margin before restructuring was reduced 0.7 percentage points from 18.3%,
reflecting the annual operating impact from the adoption of FAS No. 106.

SIX MONTHS ENDED DECEMBER 31, 1994 VERSUS
SIX MONTHS ENDED DECEMBER 25, 1993

Earnings for the six months ended December 31, 1994 were $164 million or
$1.35 per share, representing increases of 14% and 12%, respectively, over the
prior year period. These improvements resulted from double-digit gains in
worldwide alkaline volume (12%), revenue (11%) and operating income (12%).
Operating income increased on the strength of alkaline volume driven revenue
gains and improved operating leverage, partially offset by higher spending on
research and development and geographic expansion. European sales and operating
income benefited from positive currency translation. Partially offsetting the
operating income growth was higher tax expense, which increased $14 million,
primarily as a result of increased pre-tax earnings.

As used in the following tables, "Performance" excludes the impact of
foreign currency translation (i.e., the impact of translating the income
statement from local currency into U.S. dollars).

North America

<TABLE>
<CAPTION>
SIX FISCAL MONTHS ENDED
-----------------------------------------------
% CHANGE
DEC. 31, DEC. 25, -----------------------
1994 1993 REPORTED PERFORMANCE
-------- -------- -------- -----------
(UNITS/$ IN
MILLIONS)
<S> <C> <C> <C> <C>
Alkaline Unit Volume...................................... 828 720 15 15
Revenue................................................... $ 681 $ 610 12 12
Operating Income.......................................... $ 219 $ 194 13 13
</TABLE>

Alkaline volume grew as a result of expanded warehouse club distribution and
increased demand in the mass merchandiser category. Higher sales reflect
alkaline volume growth and increased lithium sales. Operating income rose 13%,
driven by higher sales and improved leveraging of non-advertising and promotion
operating expenses, partially offset by increased investment in advertising and
promotion.

6
<PAGE>
Europe

<TABLE>
<CAPTION>
SIX FISCAL MONTHS ENDED
-----------------------------------------------
% CHANGE
DEC. 31, DEC. 25, -----------------------
1994 1993 REPORTED PERFORMANCE
-------- -------- -------- -----------
(UNITS/$ IN
MILLIONS)
<S> <C> <C> <C> <C>
Alkaline Unit Volume...................................... 398 393 1 1
Revenue................................................... $ 352 $ 338 4 (2)
Operating Income.......................................... $ 83 $ 78 7 1
</TABLE>

Alkaline volume increased 1% as successful promotional activity in Italy,
new distribution into Eastern Europe, and the launch of improved alkaline
batteries and new environmentally friendly packaging in the United Kingdom were
offset by the impact of unfavorable economic conditions, particularly in France
and Spain. Excluding favorable currency translation of $22 million, sales
decreased 2% due to unfavorable country mix. On a performance basis, operating
income grew 1% as the impact of lower sales (excluding favorable currency
translation) and increased costs to support new business in Eastern Europe were
offset by leveraging of operating expenses.

Other International Markets

<TABLE>
<CAPTION>
SIX FISCAL MONTHS ENDED
-----------------------------------------------
% CHANGE
DEC. 31, DEC. 25, -----------------------
1994 1993 REPORTED PERFORMANCE
-------- -------- -------- -----------
(UNITS/$ IN
MILLIONS)
<S> <C> <C> <C> <C>
Alkaline Unit Volume...................................... 366 304 21 21
Revenue................................................... $ 189 $ 150 26 27
Operating Income.......................................... $ 30 $ 23 31 32
</TABLE>

Expanded distribution throughout Asia (including China), Africa and the
Middle East, combined with market and share growth in Mexico, Brazil and
Australia, resulted in alkaline volume and sales increases of 21% and 26%,
respectively. Leveraging of operating expenses helped operating income grow
faster than sales.

Corporate/Research & Development

<TABLE>
<CAPTION>
SIX FISCAL MONTHS ENDED
--------------------------
DEC. 31, DEC. 25,
1994 1993
-------- --------
($ IN MILLIONS)
<S> <C> <C>
Operating Expenses..................................................... $ 46 $ 40
</TABLE>

Higher spending on research and development related to the Company's high
power nickel metal hydride and lithium ion rechargeable batteries, combined with
additional goodwill amortization resulting from the Company's settlement with
the U.S. Internal Revenue Service (the "IRS") (see "Financial Condition" for
further information regarding the IRS settlement) were the principal drivers of
the 14% increase in operating expenses.

Income Tax Expense

The provision for income taxes increased as a result of higher pre-tax
income.

7
<PAGE>
FISCAL YEAR 1994 VERSUS FISCAL YEAR 1993

North America

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
JUNE 30, % CHANGE
-------------------- -----------------------
1994 1993 REPORTED PERFORMANCE
-------- -------- -------- -----------
(UNITS/$ IN
MILLIONS)
<S> <C> <C> <C> <C>
Alkaline Unit Volume...................................... 1,182 1,036 14 14
Revenue................................................... $1,009 $ 897 13 13
Operating Income:
Before Restructuring..................................... $ 279 $ 234 20 20
Restructuring............................................ -- (15) -- --
-------- -------- -- --
$ 279 $ 219 28 28
-------- -------- -- --
-------- -------- -- --
</TABLE>

North America's double-digit growth in volume, revenue and operating income
was a key driver of Duracell's record year. Alkaline volume growth was driven by
strong market and share growth in the mass merchandiser trade class in the
United States and distribution gains in the warehouse club market segment.
Revenue increased reflecting the higher alkaline volumes and generally higher
prices, partially offset by $6 million of unfavorable foreign currency
translation in Canada. Higher lithium and nickel metal hydride battery sales
were also contributors.

Operating income (excluding the 1993 restructuring) reflects higher gross
profit, primarily volume driven. Operating expense leverage of non-advertising
and promotion expenses more than offset the increased investments in advertising
and promotion, resulting in operating income growing faster than revenue.

Europe

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
JUNE 30, % CHANGE
-------------------- -----------------------
1994 1993 REPORTED PERFORMANCE
-------- -------- -------- -----------
(UNITS/$ IN
MILLIONS)
<S> <C> <C> <C> <C>
Alkaline Unit Volume...................................... 683 658 4 4
Revenue................................................... $ 576 $ 606 ( 5) 6
Operating Income:
Before Restructuring..................................... $ 120 $ 121 ( 2) 10
Restructuring............................................ -- (32) -- --
-------- -------- -- --
$ 120 $ 89 34 55
-------- -------- -- --
-------- -------- -- --
</TABLE>

European alkaline volume growth was achieved despite weak economies in key
markets and sharp competition. Distribution was added in Hungary and the Czech
Republic, which--combined with increased shipments to industrial, military and
other battery manufacturers--more than offset the impact of the economic and
competitive pressures. Private label in the U.K., which benefited from the
economic squeeze on consumers, impacted Duracell's share. Excluding the $61
million impact of unfavorable currency translation, revenue rose 6% due to
alkaline volume growth and higher prices partially offset by unfavorable country
mix.

Operating income on a performance basis (excluding the 1993 restructuring
and $12 million of unfavorable currency translation) increased 10% as a result
of revenue growth, restructuring related savings and leveraging of
non-advertising and promotion expenses.

8
<PAGE>
Other International Markets
<TABLE><CAPTION>
FISCAL YEAR ENDED
JUNE 30, % CHANGE
-------------------- -----------------------
1994 1993 REPORTED PERFORMANCE
-------- -------- -------- -----------
(UNITS/$ IN
MILLIONS)
<S> <C> <C> <C> <C>
Alkaline Unit Volume...................................... 572 502 14 14
Revenue................................................... $ 287 $ 240 20 19
Operating Income:
Before Restructuring..................................... $ 42 $ 33 27 30
Restructuring............................................ -- (18) -- --
-------- -------- --- ---
$ 42 $ 15 179 191
-------- -------- --- ---
-------- -------- --- ---
</TABLE>
Other International Markets' unit volume improved through expanded
distribution and alkaline penetration in Latin America, Africa and the Middle
East, as well as increased distribution into China. The growth in Latin America
was led by Argentina, Venezuela and Chile. Excluding Brazil and Mexico, where
growth was not as healthy, alkaline volume increased 23%. Revenue increased
primarily from alkaline volume growth and higher prices.

Operating income (excluding the 1993 restructuring) increased as a result of
higher revenue, closure of the Brazilian manufacturing facility (which resulted
in sourcing of lower cost U.S. and European product) and duty reductions in
Latin American countries. These benefits were offset by increased advertising
and promotion expenses behind the DURACELL brand and higher spending on
geographic expansion to support future growth.

Corporate/Research & Development

<TABLE><CAPTION>
FISCAL YEAR
ENDED
JUNE 30,
---------------
1994 1993
---- ----
($ IN MILLIONS)
<S> <C> <C>
Operating Expenses........................................................... $ 85 $ 81
</TABLE>

Record investments in research were made to further the development of new
high power products, such as nickel metal hydride and lithium ion rechargeable
batteries, and to further enhance the performance and quality of DURACELL
alkaline batteries.

Interest Expense

<TABLE>
<CAPTION>
FISCAL YEAR
ENDED
JUNE 30,
---------------
1994 1993
---- ----
($ IN MILLIONS)
<S> <C> <C>
Interest Expense............................................................. $ 30 $ 46
</TABLE>

The decrease in interest expense was primarily attributable to debt
reductions using excess cash generated from operations after funding all
operational needs.

Income Tax Expense

<TABLE><CAPTION>
FISCAL YEAR
ENDED
JUNE 30,
---------------
1994 1993
---- ----
($ IN MILLIONS)
<S> <C> <C>
Earnings Before Taxes........................................................ $320 $183
Tax Expense.................................................................. $120 $ 59
Effective Tax Rate........................................................... 38% 32%
</TABLE>

Significantly higher tax expense was incurred in 1994 as a result of
increased earnings before taxes and a higher effective tax rate. The effective
tax rate rose due to the full utilization of U.S. net operating loss
carryforwards for book purposes in 1993.

9
<PAGE>
Restructuring

During 1994 Duracell began realizing the benefits of the restructuring
actions taken in 1993. In North America, the implementation of Duracell's global
manufacturing strategy resulted in providing Latin America and Asia Pacific
operating units with lower cost, no added mercury alkaline batteries.
Streamlining in Europe resulted in cost savings from the integration of sales,
marketing, distribution and administrative functions. The closure of the
Brazilian manufacturing facility contributed to the increased profitability of
Other International Markets since lower cost product is now sourced from the
United States and Europe. The cash outlays and equipment-related write-offs
related to the restructuring were substantially complete as of June 30, 1994.

FINANCIAL CONDITION

CASH FLOW

Following is a summary of Duracell's key cash flow components:

<TABLE>
<CAPTION>
SIX FISCAL MONTHS ENDED
---------------------------- FISCAL YEAR ENDED JUNE 30,
DECEMBER 31, DECEMBER 25, ----------------------------------------
1994 1993 1994 1993 1992 1991 1990
------------ ------------ ---- ----- ----- ----- -----
($ IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Cash provided by operating
activities........................... $103 $111 $245 $ 297 $ 188 $ 158 $ 130
Capital expenditures................. (52) (23) (69) (42) (54) (38) (32)
Dividends paid....................... (52) (37) (89) (55) -- -- --
Debt increase (reduction)............ 5 (55) (94) (192) (244) (551) (123)
</TABLE>

Cash provided by operating activities for the six months ended December 31,
1994 was used principally for continued investment in the business through
capital expenditures and the payment of dividends. The increase in capital
expenditures is expected to continue during fiscal 1995 and over the next
several years, when compared to prior years, for capacity expansion, including
the construction of new alkaline manufacturing facilities in China and India,
efficiencies in the manufacturing process, and investments to manufacture new
high power nickel metal hydride and lithium ion rechargeable batteries.

In August 1992, Duracell, Toshiba Battery Co., Ltd. and Varta Batterie A.G.
(the "Alliance members") signed a Technical Cooperation Agreement whereunder
they agreed to engage in joint research and development of superior performing,
cadmium-free nickel metal hydride rechargeable cells. These cells are used in
powering high-power devices with rapidly growing markets, such as laptop
computers, cellular phones and other consumer electronic devices. Nickel metal
hydride batteries last longer on a single charge than conventional nickel
cadmium rechargeable batteries and are environmentally safer. The Agreement has
a five year term. Each of the Alliance members has the right to use any
technological developments emanating from their joint efforts, as well as the
right to license the other members' pre-existing nickel metal hydride technology
on commercially reasonable terms. The Alliance members remain in active
technical collaboration.

In October 1994, affiliated companies of the Alliance members formed a joint
venture for the purpose of manufacturing nickel metal hydride cells in the
United States. Duracell's and Toshiba's affiliates each hold a forty percent
(40%) interest in the joint venture and Varta's affiliate has a twenty percent
(20%) stake. Mebane, North Carolina has been selected as the site for the joint
venture's manufacturing facility and the facility is in the planning stage with
construction expected to begin in 1995. The cells made by the joint venture will
be sold to the Alliance members and will supplement the parties' cell needs now
being satisfied by production at Toshiba's existing nickel metal hydride plant
in Japan. The duration of the joint venture is indefinite and Duracell's initial
capital contribution is expected to be $20 million, which will be paid into the
joint venture over several years beginning in fiscal 1995.

10
<PAGE>
The Company will rely on cash generated from operations to fund its future
working capital and capital expenditure requirements needed to support continued
alkaline growth, geographic expansion and investment in high power rechargeable
batteries. Funds available from unused bank credit facilities will be used
primarily to fund seasonal working capital during the year when receivables and
inventories rise to meet operating requirements.

Taxes paid for the six months ended December 31, 1994 ($36.2 million) have
remained low in relation to the tax provision ($105.7 million) as taxable income
was shielded by deductions for amortization and depreciation taken earlier for
tax purposes than recognized for book purposes, principally in the United
States. As of the end of fiscal 1994, the U.S. tax net operating loss
carryforward was $130 million. The Company has resolved all issues arising from
the IRS's audit of the Company's income tax returns for the years ended June 30,
1988, 1989 and 1990. The settlement was made pursuant to the IRS's Intangibles
Settlement Initiative, a program designed by the IRS to allow an early
settlement of a large number of pending cases involving acquisitions that
included significant intangible assets. The settlement reduced the U.S. net
operating loss carryforward for tax purposes at June 30, 1994 from $350 million
to approximately $130 million and will impact cash flows principally over three
years. Because the settlement relates to deductions claimed in connection with
assets acquired by the Company in June 1988, the additional tax that will result
from the settlement has been recorded as an increase to both deferred tax
liabilities and goodwill of $105 million on the June 30, 1994 balance sheet. The
settlement will not have a significant impact on the Company's future earnings.

Dividends paid for the six months ended December 31, 1994 increased 40% over
the prior year period, reflecting the March 1994 dividend increase and the
greater number of shares outstanding. On February 23, 1995 the Company announced
an 18% increase in its quarterly cash dividend to $.26 per share, payable on
March 20, 1995, from the previous $.22 per share.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 1994, Duracell had $813 million in contractually
committed lines of credit from long-term bank credit facilities under which $353
million was outstanding. Commitments under the facilities are used to support
commercial paper, of which $218 million was outstanding at December 31, 1994.
Duracell's commercial paper program is rated investment grade. Unused borrowing
capacity under its principal bank credit facilities at December 31, 1994 was
$460 million.

Duracell utilizes interest rate swaps to reduce the impact on interest
expense of fluctuating rates on variable rate debt. Swaps or other financial
instruments that are speculative are not permitted. Interest expense reflects
the effective interest rate which is fixed through the interest rate swaps. As
of December 31, 1994, $150 million of interest rate swaps were outstanding,
effectively fixing that amount of variable rate U.S. dollar debt to an average
7.44% fixed rate U.S. dollar debt. No funds under the swap contracts were
actually borrowed or are to be repaid. The Company is subject to market risk to
the extent that interest rates on the swapped portion of the outstanding debt
decrease below 7.44%. The fair value of interest rate swaps as of December 31,
1994 was favorable $3.1 million. These swaps mature on various dates beginning
November 1998 and ending May 1999. The counterparties in these swaps are
commercial banks having an investment grade credit rating.

Duracell is exposed to risk from fluctuating prices for commodities used in
the manufacture of batteries. Some of this risk is hedged through commodity
swaps executed over the counter with commercial banks. Duracell utilizes
commodity swaps to effectively fix the price the Company will pay for the
commodity over the life of the swap. Swaps or other financial instruments that
are speculative are not permitted. Costs of products sold reflects the commodity
cost including the effects of the commodity swaps. As of December 31, 1994, $17
million of commodity swaps were outstanding, all maturing within two years from
the contract date. The maturity of the contracts is intended to correlate to the
actual purchases of the commodity. The Company is subject to market risk to the
extent that commodity prices decrease below the contract prices. The fair value
of commodity swaps as of December 31, 1994 was favorable $1.8 million. This fair
value has been deferred, and will be reflected

11
<PAGE>
in the cost of the commodity as it is actually purchased. The counterparties in
these swaps are commercial banks having an investment grade credit rating.

International operations accounted for approximately one-half of Duracell's
revenue and operating income in 1994. It is Duracell's policy to reduce cash
flow volatility due to foreign exchange fluctuations. Accordingly, the Company
closely monitors its foreign currency cash flow transactions and executes
forward contracts to reduce its foreign exchange exposures. Duracell does not
hedge foreign currency translation or foreign currency net assets or liabilities
unless such net amounts are expected to be remitted in the form of dividends or
payment of intercompany loans. Duracell also does not speculate in foreign
currencies. As of December 31, 1994, forward exchange contracts outstanding
totaled $116 million and mature within one year from the contract dates.
Contract maturities are intended to approximate the actual timing of settlement
of foreign currency commitments. Gains and losses from these contracts are
included in income, except for those contracts which hedge existing and
identified future foreign currency firm third party commitments.

As of December 31, 1994 the fair value of forward contracts was favorable
$5.0 million. Of this fair value, $0.3 million arose from forward contracts
related to anticipated intercompany transactions, and is reflected in income as
such contracts do not qualify for hedge accounting. The remaining fair value of
$4.7 million has been deferred, and will be included in the value of the related
foreign currency transactions as they occur.

In September 1994, Duracell Inc. (the Company's U.S. operating subsidiary)
entered into an Administrative Order By Consent with the U.S. Environmental
Protection Agency ("EPA") whereunder in December 1994 Duracell submitted to the
EPA a plan for a complete remedial investigation and feasibility study relating
to mercury and volatile organic compounds contamination at the Company's
Lexington, North Carolina manufacturing site. The Company has also agreed to
implement such plan following the EPA's approval of it. Comprehensive
remediation actions have taken place at the Lexington site over the past ten
years, but some additional remediation work is proposed in the plan submitted to
the EPA. As of December 31, 1994, Duracell estimates that future investigatory
and remediation costs will be approximately $6 million, the cost of which the
Company has fully reserved. The Company believes that the amount reserved is
sufficient to remediate the property; however, the final remediation plan has
not been agreed to by the EPA. The Company believes that if additional remedial
work is required by the EPA beyond the work planned by the Company, such
additional remediation would not likely exceed an additional $6 million.

FINANCIAL STRATEGY

After fully funding investments in its core business and key strategic
initiatives, and maintaining the capital structure necessary to sustain an
investment grade credit rating, Duracell returned a portion of cash flow to
shareholders by paying cash dividends of $89 million, or $.76 per common share,
during the fiscal year ended June 30, 1994. This return amounted to 44% of
income before extraordinary items and accounting changes compared with 31% in
1993 (excluding restructuring). For the six months ended December 31, 1994
Duracell paid $51.8 million, or $.44 per share, compared to $37.1 million, or
$.32 per share, for the six months ended December 25, 1993. On February 23, 1995
Duracell announced an 18% increase in its quarterly cash dividend to $.26 per
share from the previous $.22 per share. Duracell expects to continue paying cash
dividends with a payout ratio in line with comparable consumer product
companies.

During December 1994 the Company repurchased 441,400 shares of its common
stock in open market purchases at a total cost of $18.4 million. During January
1995 the Company repurchased an additional 558,600 shares in open market
purchases at a total cost of $22.8 million. Future excess cash may be used to
repurchase shares of Duracell's common stock depending upon prevailing market
conditions. The Company has the authorization to purchase up to 3,000,000 shares
of its common stock reflecting the original 4,000,000 share authorization by the
Board of Directors less the 1,000,000 shares purchased through January 1995.

12
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS

All of the shares of Common Stock being offered hereby are being sold by the
Selling Stockholders.

The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of January 28, 1995, assuming the exercise of all
options exercisable on, or within 60 days of, such date, and as adjusted to give
effect to the Offerings (assuming the Underwriters' overallotment options are
not exercised) by (i) each director, (ii) the Chief Executive Officer and each
of the other four most highly compensated executive officers of the Company
during fiscal 1994, (iii) all executive officers and directors as a group and
(iv) the Company's principal stockholders, including the Selling Stockholders.
Other than as set forth in the table below, there are no persons known to the
Company to beneficially own more than 5% of the Common Stock.

BEFORE OFFERINGS AFTER OFFERINGS
------------------------- -------------------------
FULLY FULLY
NAME DILUTED PERCENTAGE DILUTED PERCENTAGE
-------------------------------------------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
KKR Associates(1)
9 West 57th Street
New York, New York 10019.................. 57,200,000 47.33% 43,200,000 35.74%
Charles R. Perrin(2)........................ 579,256 0.48% 579,256 0.48%
Charles E. Kiernan(3)....................... 140,850 0.12% 140,850 0.12%
G. Wade Lewis............................... 71,918 (8) 71,918 (8)
C. Robert Kidder(4)......................... 470,733 0.39% 470,733 0.39%
Robert M. Kavner............................ 1,500 (8) 1,500 (8)
Paula Stern................................. 1,500 (8) 1,500 (8)
Scott M. Stuart(1).......................... 5,000 (8) 5,000 (8)
Henry R. Kravis(1)(5)....................... -- -- -- --
Paul E. Raether(1)(6)....................... -- -- -- --
George R. Roberts(1)(7)..................... -- -- -- --
Christophe Ripert........................... 18,750 (8) 18,750 (8)
All directors and executive officers as a
group (19 persons)........................ 1,652,825 1.37% 1,652,825 1.37%
</TABLE>

-------------------

(1) Shares of Common Stock shown as owned by KKR Associates are owned of record
by limited partnerships affiliated with KKR (the "Common Stock
Partnerships") of which KKR Associates is the sole general partner and as to
which it possesses sole voting and investment power. Messrs. Kravis,
Raether, Roberts and Stuart (all of whom are directors of the Company) and
Saul A. Fox, Edward A. Gilhuly, Perry Golkin, James H. Greene, Jr., Robert
I. MacDonnell, Michael W. Michelson, Clifton S. Robbins and Michael T.
Tokarz, as the general partners of KKR Associates, may be deemed to share
beneficial ownership of such shares. Each of these individuals disclaims
beneficial ownership of any shares shown as owned by KKR Associates.

(2) A private foundation established by Mr. Perrin owns 100,000 shares. Mr.
Perrin has disclaimed beneficial ownership of these shares.

(3) A trust for the benefit of Mr. Kiernan's family owns 44,503 shares. Mr.
Kiernan has disclaimed beneficial ownership of these shares.

(4) A trust for the benefit of members of Mr. Kidder's family owns 43,000
shares. Mr. Kidder has disclaimed beneficial ownership of these shares.

(5) A trust for the benefit of members of Mr. Kravis's family owns 50,000
shares. Mr. Kravis has disclaimed beneficial ownership of these shares.

(6) A trust for the benefit of members of Mr. Raether's family owns 50,000
shares. Mr. Raether has disclaimed beneficial ownership of these shares.

(7) A private foundation established by Mr. Roberts owns 70,000 shares. Mr.
Roberts has disclaimed beneficial ownership of these shares.

(8) Less than 0.1%.

13
<PAGE>
DESCRIPTION OF CAPITAL STOCK

GENERAL

The authorized capital stock of the Company consists of 150,000,000 shares
of Common Stock, par value $.01 per share, and 100,000,000 shares of preferred
stock, par value $.01 per share (the "Preferred Stock").

COMMON STOCK

As of February 23, 1995, 116,915,880 shares of Common Stock were issued and
outstanding, and 9,415,485 shares were issuable upon exercise of outstanding
stock options.

Each share of Common Stock is entitled to one vote at all meetings of
stockholders of the Company for the election of directors and all other matters
submitted to stockholder vote. The Common Stock does not have cumulative voting
rights. Accordingly, the holders of a majority of the outstanding shares of
Common Stock can elect all the directors if they choose to do so. Dividends may
be paid to the holders of Common Stock when, as and if declared by the Board of
Directors of the Company out of funds legally available therefor. The Common
Stock has no preemptive or similar rights. Holders of Common Stock are not
liable to further call or assessment. Upon the liquidation, dissolution or
winding up of the affairs of the Company, any assets remaining after provision
for payment of creditors would be distributed pro rata among holders of Common
Stock.

The Restated Certificate of Incorporation of the Company provides that,
except under certain circumstances, directors of the Company shall not be
personally liable to the Company or its stockholders for monetary damages for
breach of fiduciary duties as a director. That provision does not exonerate the
directors from liability under federal securities laws, and has no effect on any
non-monetary remedies that may be available to the Company or its stockholders.
The By-laws of the Company provide for indemnification of the officers and
directors of the Company to the full extent permitted by applicable law.

The Company's By-laws provide for additional notice requirements for
stockholder nominations and proposals at annual or special meetings of the
Company. At annual meetings, stockholders will be entitled to submit nominations
for directors or other proposals only upon written notice to the Company at
least 60 days prior to the annual meeting.

First Chicago Trust Company of New York is the Registrar and the Transfer
Agent for the Common Stock.

PREFERRED STOCK

The Board of Directors of the Company is authorized, without further
stockholder action, to divide any or all shares of authorized Preferred Stock
into series and to fix and determine the designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereon, of any series so established, including voting powers,
dividend rights, liquidation preferences, redemption rights and conversion
privileges. As of the date of this Prospectus, the Board of Directors of the
Company has not authorized any series of Preferred Stock and there are no plans,
agreements or understandings for the issuance of any shares of Preferred Stock.

14
<PAGE>
UNDERWRITING

The U.S. Underwriters named below (the "U.S. Underwriters"), acting through
their U.S. representatives, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Goldman, Sachs & Co., Bear, Stearns & Co. Inc., CS First Boston Corporation,
and Salomon Brothers Inc (the "U.S. Representatives"), have severally agreed,
subject to the terms and conditions of a U.S. Purchase Agreement with the
Selling Stockholders and the Company (the "U.S. Purchase Agreement"), to
purchase from the Selling Stockholders the aggregate number of shares of
Common Stock set forth opposite their respective names below. The U.S.
Underwriters are committed to purchase all of such shares if any are purchased.
Under certain circumstances, the commitments of non-defaulting U.S. Underwriters
may be increased as set forth in the U.S. Purchase Agreement.

NUMBER OF
U.S. UNDERWRITERS SHARES
------------------------------------------------------------- ---------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................
Goldman, Sachs & Co. ........................................
Bear, Stearns & Co. Inc. ....................................
CS First Boston Corporation..................................
Salomon Brothers Inc.........................................

----------
Total........................................................ 11,200,000
----------
----------

The Selling Stockholders have also entered into a purchase agreement (the
"International Purchase Agreement") with certain underwriters outside the United
States (the "International Underwriters" and, together with the U.S.
Underwriters, the "Underwriters"), for whom Merrill Lynch International
Limited, Goldman Sachs International, Bear, Stearns International Limited, CS
First Boston Limited and Salomon Brothers International Limited are
acting as representatives (the "International Representatives"). Subject to
the terms and conditions set forth in the International Purchase Agreement,
and concurrently with the sale of 11,200,000 shares of Common Stock to the U.S.
Underwriters pursuant to the U.S. Purchase Agreement, the Selling Stockholders
have agreed to sell to the International Underwriters, and the International
Underwriters have severally agreed to purchase, an aggregate of 2,800,000
shares of Common Stock. Under certain circumstances under the International
Purchase Agreement, the commitments of non-defaulting International Underwriters
may be increased. The initial public offering price per share and the total
underwriting discount per share are identical under the U.S. Purchase
Agreement and the International Purchase Agreement.

15
<PAGE>
The U.S. Underwriters and the International Underwriters have entered into
an Intersyndicate Agreement which provides for the coordination of their
activities. The Underwriters are permitted to sell shares of Common Stock to
each other for purposes of resale at the initial public offering price, less an
amount not greater than the selling concession.

The Selling Stockholders have granted the U.S. Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to
1,680,000 additional shares of Common Stock to cover over-allotments, if any, at
the initial public offering price, less the underwriting discount. If the U.S.
Underwriters exercise this option, each of the U.S. Underwriters will have a
firm commitment, subject to certain conditions, to purchase approximately the
same percentage of the option shares as the number of shares of Common Stock to
be purchased by that U.S. Underwriter shown in the foregoing table bears to the
11,200,000 shares of Common Stock initially offered hereby.

The U.S. Underwriters propose initially to offer the shares of Common Stock
to the public at the public offering price set forth on the cover page of this
Prospectus, and to certain dealers at such price less a concession not in excess
of $ per share. The U.S. Underwriters may allow, and such dealers may reallow,
a discount not in excess of $ per share on sales to certain other dealers.
After the initial public offering of the Common Stock, the public offering
price, concession and discount may be changed.

The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities which may be incurred in
connection with the offering of the Common Stock and the exercise of the
over-allotment options, including liabilities under the Securities Act.

Without the consent of Merrill Lynch & Co., as representative of the U.S.
Underwriters, each of the Company, the Selling Stockholders, and the executive
officers of the Company have agreed not to, for a period of 90 days, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of, any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for any such shares. The foregoing agreements are
subject to certain exceptions.

Under the terms of the Intersyndicate Agreement, the U.S. Underwriters and
any dealer to whom they sell shares of Common Stock will not offer to sell or
sell shares of Common Stock to persons who are non-United States persons or to
persons they believe intend to resell to persons who are non-United States
persons, and the International Underwriters and any dealer to whom they sell
shares of Common Stock will not offer to sell or sell shares of Common Stock to
United States persons or to persons they believe intend to resell to United
States persons, except in each case for transactions pursuant to such agreement.

LEGAL MATTERS

The legality of the shares of Common Stock offered hereby will be passed
upon for the Company by Simpson Thacher & Bartlett (a partnership which includes
professional corporations), New York, New York, and certain legal matters will
be passed upon for the Underwriters by Latham & Watkins, New York, New York.
Certain partners of Latham & Watkins and Simpson Thacher & Bartlett, members of
their respective families, related persons and others have an indirect interest,
through limited partnerships, in less than 1% of the Common Stock in the case of
each firm. Such persons do not have the power to vote or dispose of such shares
of Common Stock. Latham & Watkins renders legal services to KKR on a regular
basis and renders certain legal services to the Company.

16
<PAGE>
EXPERTS

The Company's consolidated financial statements and related financial
statement schedules incorporated in this Prospectus by reference from the
Company's Annual Report on Form 10-K for the year ended June 30, 1994 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.

17
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.

-------------------

TABLE OF CONTENTS

PAGE
----

Available Information................. 2
Incorporation of Certain Information
by Reference........................ 2
The Company........................... 3
Proceeds of Offering.................. 4
Price Range of Common Stock and
Dividend Policy....................... 4
Selected Financial Data............... 5
Financial Overview.................... 6
Principal and Selling Stockholders.... 13
Description of Capital Stock.......... 14
Underwriting.......................... 15
Legal Matters......................... 16
Experts............................... 17

14,000,000 SHARES

DURACELL
INTERNATIONAL INC.

COMMON STOCK

---------------------
PROSPECTUS
---------------------

MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
CS FIRST BOSTON
SALOMON BROTHERS INC

MARCH , 1995

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
[ALTERNATE]

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MARCH 14, 1995

PROSPECTUS
----------

14,000,000 SHARES
DURACELL INTERNATIONAL INC.
COMMON STOCK
-------------------

Of the 14,000,000 shares of Common Stock offered, 2,800,000 shares are being
offered hereby in an international offering outside the United States and Canada
and 11,200,000 shares are being offered in a concurrent offering in the United
States and Canada. The price to the public and the aggregate underwriting
discount per share are identical for both Offerings. See "Underwriting."

The Common Stock is listed on the New York Stock Exchange under the symbol
"DUR." On March 13, 1995, the last reported sale price of the Common Stock on
the New York Stock Exchange was $42 1/4.

-------------------

(1) The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities under the Securities Act of
1933. See "Underwriting."
(2) The Selling Stockholders have granted the International Underwriters and the
U.S. Underwriters 30-day options to purchase up to 420,000 and 1,680,000
additional shares of Common Stock, respectively, to cover over-allotments.
If these options are exercised in full, the total Price to Public,
Underwriting Discount, and Proceeds to Selling Stockholders will be
$ , $ and $ , respectively. See "Underwriting."
-------------------

The shares of Common Stock are being offered by the several Underwriters
subject to prior sale, when, as and if issued to and accepted by them, subject
to approval of certain legal matters by counsel for the Underwriters. The
Underwriters reserve the right to withdraw, cancel or modify such offer and to
reject orders in whole or in part. It is expected that delivery of the shares of
Common Stock will be made in New York, New York on or about March , 1995.

-------------------

MERRILL LYNCH INTERNATIONAL LIMITED
GOLDMAN SACHS INTERNATIONAL
BEAR, STEARNS INTERNATIONAL LIMITED
CS FIRST BOSTON
SALOMON BROTHERS INTERNATIONAL LIMITED

-------------------

CERTAIN U.S. TAX CONSIDERATIONS APPLICABLE TO
NON-U.S. HOLDERS OF THE COMMON STOCK

The following is a general discussion of certain U.S. federal income and
estate tax consequences of the ownership and disposition of Common Stock by a
person that, for U.S. federal income tax purposes, is a non-resident alien
individual, a foreign corporation, a foreign partnership or a foreign estate or
trust (a "non-U.S. holder"). This discussion does not consider specific facts
and circumstances that may be relevant to a particular non-U.S. holder's tax
position and does not deal with U.S. state and local or non-U.S. tax
consequences. Furthermore, the following discussion is based on provisions of
the U.S. Internal Revenue Code of 1986, as amended (the "Code"), existing and
proposed regulations promulgated thereunder, and administrative and judicial
interpretations thereof as of the date hereof, all of which are subject to
change, possibly with retroactive effect. Each prospective non-U.S. holder is
urged to consult a tax advisor with respect to the U.S. federal tax consequences
of holding and disposing of Common Stock, as well as any tax consequences that
may arise under the laws of any U.S. state, municipality or other taxing
jurisdiction.

An individual may, among other ways, be deemed to be a resident alien (as
opposed to a non-resident alien) by virtue of being present in the United States
on at least 31 days in the calendar year and for an aggregate of 183 days during
a three-year period ending in the current calendar year (counting for such
purposes all of the days present in the current year, one-third of the days
present in the immediately preceding year, and one-sixth of the days present in
the second preceding year). Resident aliens are subject to U.S. federal tax as
if they were U.S. citizens.

Dividends. Dividends paid to a non-U.S. holder of Common Stock will be
subject to withholding of U.S. federal income tax at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty, unless the
dividends are effectively connected with the conduct of a trade or business
by the non-U.S. holder within the United States. Dividends that are
effectively connected with such holder's conduct of a trade or business in the
United States are subject to U.S. federal income tax on a net income basis at
applicable graduated individual or corporate rates, and are not generally
subject to withholding. Any such effectively connected dividends received by a
foreign corporation may also, under certain circumstances, be subject to an
additional "branch profits tax" at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty.

Dividends paid to an address outside the United States are presumed to be
paid to a resident of such country (unless the payer has knowledge to the
contrary) for purposes of the withholding discussed above and for purposes of
determining the applicability of a tax treaty rate. Under proposed U.S. Treasury
regulations, not currently in effect, however, a non-U.S. holder of Common Stock
who wishes to claim the benefit of an applicable treaty rate would be required
to satisfy applicable certification and other requirements. Currently certain
certification and disclosure requirements must be complied with in order to be
exempt from withholding under the effectively connected income exemption.

A non-U.S. holder of Common Stock that is eligible for a reduced rate of
U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any
excess amounts withheld by filing an appropriate claim for refund with the U.S.
Internal Revenue Service.

Gain on Disposition of Common Stock. A non-U.S. holder generally will not be
subject to U.S. federal income tax in respect of gain recognized on a
disposition of Common Stock unless (i) the gain is effectively connected with a
trade or business of the non-U.S. holder in the United States or, if a tax
treaty applies, attributable to a permanent establishment maintained by the
non-U.S. holder, (ii) in the case of a non-U.S. holder who is an individual
and holds the Common Stock as capital asset, such holder is present in the
United States for 183 or more days in the taxable year of the sale and certain
other conditions are met, or (iii) the Company is or has been a "U.S. real
property holding corporation" for federal income tax purposes. The Company has
not been, is not and does not anticipate becoming, a "U.S. real property
holding corporation" for U.S. federal income tax purposes. If an individual
non-U.S. holder falls under clause (i) above, he or she will be taxed on his
or her net gain derived from the sale at regular graduated U.S. federal income
tax rates. If an individual non-U.S. holder falls under clause (ii) above, he
or she will be subject to a flat 30% tax on the gain derived from the sale
which may be offset by U.S. capital losses. If a non-U.S. holder that is a
foreign corporation falls under clause (i) above, it will be taxed on its
gain at regular graduated U.S. federal income tax rates and, in addition, may
be subject to the branch profits tax equal to 30% of its "effectively connected
earnings and profits" within the meaning of the Code for the taxable year, as
adjusted for certain items, or at such lower rate as may be specified by an
applicable income tax treaty.

15
<PAGE>
[Alternate Tax Section for International Prospectus]

Federal Estate Taxes. Common Stock owned or treated as owned by a non-U.S.
holder at the time of death will be included in such holder's gross estate for
U.S. federal estate tax purposes, unless an applicable estate tax treaty
provides otherwise.

U.S. Information Reporting Requirements and Backup Withholding Tax. The
Company must report annually to the Internal Revenue Service and to each
non-U.S. holder the amount of dividends paid to such holder and the tax withheld
with respect to such dividends, regardless of whether withholding was required.
Copies of the information returns reporting such dividends and withholding may
also be made available to the tax authorities in the country in which the
non-U.S. holder resides under the provisions of an applicable income tax treaty.

Backup withholding (which generally is a withholding tax imposed at the rate
of 31% on certain payments to persons that fail to furnish certain information
under the U.S. information reporting requirements) will generally not apply to
dividends paid to a non-U.S. holder at an address outside the United States
unless the payer has knowledge that the payee is a U.S. person.

In general, backup withholding and information reporting will not apply to a
payment of the proceeds of a sale of Common Stock to or through a foreign office
of a broker. If, however, such broker is, for U.S. federal income tax purposes,
a U.S. person, a controlled foreign corporation, or a foreign person that
derives 50% or more of its gross income for certain periods from the conduct of
a trade or business in the United States, such payments will not be subject to
backup withholding but will be subject to information reporting, unless (1) such
broker has documentary evidence in its records that the beneficial owner is a
non-U.S. holder and certain other conditions are met, or (2) the beneficial
owner otherwise establishes an exemption.

Payment to or through a U.S. office of a broker of the proceeds of a sale of
Common Stock is subject to both backup withholding and information reporting
unless the beneficial owner certifies under penalties of perjury that it is a
non-U.S. holder, or otherwise establishes an exemption.

Any amounts withheld under the backup withholding rules may be allowed as a
refund or a credit against such holder's U.S. federal income tax liability
provided the required information is furnished to the U.S. Internal Revenue
Service.

The backup withholding and information reporting rules are currently under
review by the U.S. Treasury Department and their application to the Common
Stock could be changed by future regulations.

16
<PAGE>
[Alternate Underwriting Section for International Prospectus]

UNDERWRITING

The International Underwriters named below (the "International
Underwriters"), acting through their International representatives, Merrill
Lynch International Limited, Goldman Sachs International, Bear, Stearns
International Limited, CS First Boston Limited and Salomon Brothers
International Limited (the "International Representatives"), have severally
agreed, subject to the terms and conditions of an International Purchase
Agreement with the Selling Stockholders and the Company (the "International
Purchase Agreement"), to purchase from the Selling Stockholders the aggregate
number of shares of Common Stock set forth opposite their respective names
below. The International Underwriters are committed to purchase all of such
shares if any are purchased. Under certain circumstances, the commitments of
non-defaulting International Underwriters may be increased as set forth in the
International Purchase Agreement.

NUMBER OF
INTERNATIONAL UNDERWRITERS SHARES
----------------------------------------------------------------------- ---------
<S> <C>
Merrill Lynch International Limited....................................
Goldman Sachs International ...........................................
Bear, Stearns International Limited....................................
CS First Boston Limited................................................
Salomon Brothers International Limited.................................

---------
Total....................................................... 2,800,000
---------
---------
</TABLE>

The Selling Stockholders have also entered into a purchase agreement (the
"U.S. Purchase Agreement") with certain underwriters in the United States (the
"U.S. Underwriters" and, together with the International Underwriters, the
"Underwriters"), for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Goldman, Sachs & Co., Bear, Stearns & Co. Inc., CS First Boston Corporation
and Salomon Brothers Inc are acting as representatives (the "U.S.
Representatives"). Subject to the terms and conditions set forth in the U.S.
Purchase Agreement, and concurrently with the sale of 2,800,000 shares of
Common Stock to the International Underwriters pursuant to the International
Purchase Agreement, the Selling Stockholders have agreed to sell to the U.S.
Underwriters, and the U.S. Underwriters have severally agreed to purchase, an
aggregate of 11,200,000 shares of Common Stock. Under certain circumstances
under the U.S. Purchase Agreement, the commitments of non-defaulting U.S.
Underwriters may be increased. The initial public offering price per share and
the total underwriting discount per share are identical under the International
Purchase Agreement and the U.S. Purchase Agreement.

The International Underwriters and the U.S. Underwriters have entered into
an Intersyndicate Agreement which provides for the coordination of their
activities. The Underwriters are permitted to sell shares of Common Stock to
each other for purposes of resale at the initial public offering price, less an
amount not greater than the selling concession.

The Selling Stockholders have granted the International Underwriters an
option exercisable for 30 days after the date of this Prospectus to purchase up
to 420,000 additional shares of Common Stock to cover over-allotments, if any,
at the initial public offering price, less the underwriting discount. If the
International Underwriters exercise this option, each of the International
Underwriters will have a firm commitment, subject to certain conditions, to
purchase approximately the same percentage of the option shares as the number of
shares of Common Stock to be purchased by that International Underwriter shown
in the foregoing table bears to the 2,800,000 shares of Common Stock initially
offered hereby.

17
<PAGE>
[Alternate Underwriting Section for International Prospectus]

The International Underwriters propose initially to offer the shares of
Common Stock to the public at the public offering price set forth on the cover
page of this Prospectus, and to certain dealers at such price less a concession
not in excess of $ per share. The International Underwriters may allow, and
such dealers may reallow, a discount not in excess of $ per share on sales to
certain other dealers. After the initial public offering of the Common Stock,
the public offering price, concession and discount may be changed.

Without the consent of Merrill Lynch & Co. as representative of the U.S.
Underwriters, each of the Company, the Selling Stockholders and the executive
officers of the Company have agreed not to, for a period of 90 days, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of, any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for any such shares. The foregoing agreements are
subject to certain exceptions.

Each International Underwriter has agreed that (i) it has not offered or
sold and will not offer or sell in the United Kingdom, by means of any document,
any shares of Common Stock offered hereby other than to persons whose ordinary
business it is to buy or sell shares or debentures, whether as principal or
agent, or in circumstances which do not constitute an offer to the public within
the meaning of the Companies Act 1985; (ii) it has complied and will comply
with all applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Common Stock in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and
will only issue or pass on in the United Kingdom any document received by it
in connection with the issue of the Common Stock to a person who is of a kind
described in Article 9(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1988 or to whom the document may otherwise
be lawfully issued or passed on.

Purchasers of the shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the offering price set forth on the cover page hereof.

LEGAL MATTERS

EXPERTS

18
<PAGE>
ALTERNATE

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR AN UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.

-------------------

TABLE OF CONTENTS

PAGE
----
Available Information................. 2
Incorporation of Certain Information
by Reference........................ 2
The Company........................... 3
Proceeds of Offering.................. 4
Price Range of Common Stock and
Dividend Policy....................... 4
Selected Financial Data............... 5
Financial Overview.................... 6
Principal and Selling Stockholders.... 13
Description of Capital Stock.......... 14
Certain U.S. Tax Considerations
Applicable to Non-U.S. Holders of
the Common Stock.................... 15
Underwriting.......................... 17
Legal Matters......................... 18
Experts............................... 18

14,000,000 SHARES

DURACELL
INTERNATIONAL INC.

COMMON STOCK

---------------------
PROSPECTUS
---------------------

MERRILL LYNCH
INTERNATIONAL LIMITED
GOLDMAN SACHS
INTERNATIONAL
BEAR, STEARNS
INTERNATIONAL LIMITED
CS FIRST BOSTON
SALOMON BROTHERS
INTERNATIONAL LIMITED

MARCH , 1995

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Registration Fee........................................... $ 233,620
NASD Filing Fee............................................ 30,500
Printing and Engraving Expenses............................ 150,000
Legal Fees and Expenses.................................... 100,000
Accounting Fees and Expenses............................... 75,000
Blue Sky Fees and Expenses................................. 15,000
Miscellaneous.............................................. 7,699
-----------
Total...................................................... $ 611,819
-----------
-----------

All of such expenses will be paid by the Company.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company is a Delaware corporation. Reference is made to Section
102(b)(7) of the Delaware General Corporation Law (the "DGCL"), which enables a
corporation in its original certificate of incorporation or an amendment thereto
to eliminate or limit the personal liability of a director for violations of the
director's fiduciary duty, except (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the DGCL (providing for liability of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions) or (iv) for any transaction from which a director derived an
improper personal benefit.

Reference also is made to Section 145 of the DGCL, which provides that a
corporation may indemnify any persons, including officers and directors, who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an officer, director,
employee or agent of such corporation, or is or was serving at the request of
such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such officer, director, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, for criminal proceedings, had no reasonable
cause to believe that his conduct was unlawful. A Delaware corporation may
indemnify officers and directors in an action by or in the right of the
corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses that such officer or
director actually and reasonably incurred.

The Restated Certificate of Incorporation of the Company provides that
except under certain circumstances, directors of the Company shall not be
personally liable to the Company or its stockholders for monetary damages for
breach of fiduciary duties as a director. Article IV of the By-laws of the
Company provides for indemnification of the officers and directors of the
Company to the full extent permitted by applicable law.

II-1
<PAGE>
ITEM 16. EXHIBITS

EXHIBIT
NO. DESCRIPTION
------- ----------------------------------------------------------------------
*1.1 --Proposed form of U.S. Purchase Agreement.
*1.2 --Proposed form of International Purchase Agreement.
*5.1 --Opinion of Simpson Thacher & Bartlett regarding the
legality of the shares of
Common Stock being registered.
23.1 --Consent of Deloitte & Touche LLP.
*23.2 --Consent of Simpson Thacher & Bartlett (included in their
opinion filed as Exhibit
5.1).
*24.1 --Powers of Attorney.

------------

* Previously filed.

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

The registrant hereby undertakes:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of a registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-2
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 2
TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK ON
MARCH 14, 1995.

DURACELL INTERNATIONAL INC.

By /s/ GREGG A. DWYER
...................................

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
AMENDMENT NO. 2 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED ON MARCH 14, 1995.

<TABLE><CAPTION>
SIGNATURES TITLE
-------------------------------------- ---------------------------------------------------
<S> <C>
* Chairman of the Board, Chief Executive Officer and
...................................... Director
Charles R. Perrin
* President, Chief Operating Officer and Director
......................................
Charles E. Kiernan

* Senior Vice President, Finance, Chief Financial
...................................... Officer and Director
G. Wade Lewis

* Vice President and Controller
......................................
Robert A. Burgholzer, Jr.

* Director
......................................
C. Robert Kidder

* Director
......................................
Henry R. Kravis

* Director
......................................
Paul E. Raether

* Director
......................................
George R. Roberts

* Director
......................................
Scott M. Stuart
*
...................................... Director
Robert M. Kavner
*
...................................... Director
Paula Stern

*By: /s/ GREGG A. DWYER
..................................
Attorney-in-fact
</TABLE>

II-3
<PAGE>
INDEX TO EXHIBITS

SEQUENTIAL PAGE
EXHIBITS NUMBER
------- ----------------
<S> <C> <C>
23.1 --Consent of Deloitte & Touche LLP....................................
</TABLE>

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Amendment No. 2 to
Registration Statement No. 33-57857 of Duracell International Inc. on Form S-3
of our reports dated August 10, 1994 appearing in and incorporated by reference
in the Annual Report on Form 10-K of Duracell International Inc. for the year
ended June 30, 1994 and to the references to us under the headings "Selected
Financial Data" and "Experts" in the Prospectus, which is part of this
Registration Statement.

/s/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP
Stamford, Connecticut

March 13, 1995