Last month we heard reports COTY had won a bid to purchase two of P&G’s product lines, and today the company announced it has signed a definitive agreement to acquire The Procter & Gamble Company’s fine fragrance, colour cosmetics, and hair colour businesses.
The merger will take place through a tax-free Reverse Morris Trust transaction, and make COTY one of the world’s largest beauty companies. Together with P&G’s businesses, COTY is expected to become the global leader in fragrances and to significantly enhance its position in colour cosmetics.
The transaction will see COTY add Hugo Boss, Dolce & Gabbana and Gucci fragrances, COVERGIRL and Max Factor colour cosmetics, and Wella and Clairol hair colour brands to its portfolio.
“With the beauty talent from both sides and the fantastic portfolio of world-class brands, we have the opportunity to create a highly focused, pure-play leader and challenger in beauty which can deliver exciting opportunities and benefits for employees, licensors, customers and suppliers,” says COTY CEO chairman and interim CEO Bart Becht.
“There is no question that with the broader offering of leading brands, strong brand support, the development of a better pipeline of innovative products and the much broader geographical reach and scale, COTY will strengthen its competitive position and ability to capitalise on revenue and profit growth opportunities over time.”
For a more detailed analysis of the business deal and what it means for COTY, stay tuned for Elisabeth King's column published on Monday, July 13.
