$12.5bn deal reverses P&G brands into Coty
Coty has sealed a deal to buy Procter & Gamble's beauty business, which includes brands such as Clairol and Wella, in a $12.5bn (€11.3bn) transaction that will make the perfume maker one of the world's largest beauty companies.
P&G will separate 43 of its cosmetics, fragrance and haircare brands and fold them into Coty under a "Reverse Morris Trust" transaction that will ultimately give P&G shareholders a majority stake in the new entity.
The combined company is expected to have annual revenue of more than $10bn - double Coty's turnover - and will be led by Coty CEO Bart Becht.
Coty was founded in France but is based in the US, and produces perfume under brands including Marc Jacobs, Calvin Kelin, Playboy and Addidas.
JAB Cosmetics, which owns 97pc of Coty's Class B shares, is in favor of the deal, Coty said. JAB is a unit of Joh. A. Benckiser, the investment vehicle of Germany's billionaire Reimann family.
Coty said the deal valued the P&G Beauty Business at $12.5bn at the time of the proposal, based on the number of Coty basic shares outstanding and an average Coty trading price.
Based on Coty's current stock price and outstanding shares and equity grants, the value of the transaction is about $15bn, P&G said.
Goldman Sachs advised P&G, while Morgan Stanley, Barclays, JP Morgan and BofA Merrill advised Coty. P&G's shares opened up 1pc at $81.83, while Coty was up 1.3pc at $31.94 yesterday. (Reuters)