Loading...
Summary: The deal between Coty Inc. and Procter & Gamble is expected to close in late 2016 and would make Coty the top perfume maker.
For $12.5 billion, Coty Inc. will buy Procter & Gamble’s hair care, make-up, and perfume businesses. Coty is the U.S. maker of Chloe and Calvin Klein perfume. This merger will be the largest in cosmetics history and make them the No. 1 perfume maker. Currently L’Oreal holds the top spot with Estee Lauder in second.
Some of P&G’s perfumes include Gucci, Dolce & Gabbana, and Hugo Boss and the make-up brands of Max Factor and Cover Girl. The acquisition will more than double their size a combined sale of over $10 billion. Coty’s sales have either been hovering or falling while P&G has had trouble expanding their beauty business causing some investors to hesitate at the benefits of such a merger.
Coty will have to take on P&G’s large debt of $2.9 billion, small savings, and big transitions ahead to make the change beneficial. The deal will save Coty $500 million.
P&G is looking to focus their attention of fewer brands that are faster growing. They are the number one seller in the world for household products. The 43 brands that they have sold generated 7 percent of P&G’s total revenue, or $5.9 billion.
Get JD Journal in Your Mail
Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!
Coty has never been a part of the hair business so taking on the brands Wella and Clairol will be a new adventure that BECHT’s BETCoty will take on. They anticipate that hair color products will account for 24 percent of total sales.
Source: http://www.reuters.com/article/2015/07/09/us-procter-gamble-divestiture-coty-idUSKCN0PJ1K320150709
Photo: shows.beautypackaging.com
