Coty, Inc, the US maker of Calvin Klein and Chloe perfume, is expected to slot itself as the number one perfume maker ahead of L’Oreal, following a buyout of Procter & Gamble’s perfume, hair care and make-up businesses. The brand currently holds the number three position in the make-up provider category, following its French rival, Estée Lauder.
In one of the biggest cosmetics mergers in the recent past, the company has plans to buy P&G’s perfume, hair care and make-up businesses, which includes brands such as Clairol and Wella for $12.5 billion. This will make the perfume maker, one of the world’s largest beauty companies. To give P&G shareholders a majority stake in the new entity, P&G will separate 43 of its cosmetics, fragrance and haircare brands and fold them into Coty under a Reverse Morris Trust transaction.
Based on Coty’s current stock price and outstanding shares and equity grants, the total value of the transaction is about $15 billion as per P&G sources. Led by Coty CEO, Bart Becht, JAB Cosmetics B.V., which owns 97 per cent of Coty’s Class B shares, approves of the deal. JAB is a unit of Joh. A. Benckiser, the investment vehicle of Germany’s billionaire Reimann family. The combined company is expected to have annual revenue of more than $10 billion.
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