CoverGirl, Clairol, Max Factor, Wella among Coty's new brands
Coty said Monday that the transaction, valued at more than $11 billion, makes it the world’s third-largest beauty care company, with annual revenue of about $9 billion. The deal, announced in July 2015, brought Coty 43 beauty brands from P&G, adding such names as Hugo Boss and Gucci to its fragrance offerings, CoverGirl and Max Factor to its cosmetics portfolio, and Wella and Clairol its hair coloring business.
With the addition of P&G specialty beauty, as the collective businesses were known in the transaction, Coty said it will hold the No. 1 position in fragrances, No. 2 position in salon hair and No. 3 position in color cosmetics globally. Coty also has adopted a new butterfly-shaped logo.
“It is my great privilege to take over the reins of leadership at such a transformational moment. Today marks a new chapter in Coty’s rich heritage,” Coty chief executive officer Camillo Pane said in a statement.
“With this merger, we have brought together a powerful portfolio of much-loved beauty brands and some of the world’s most talented people in beauty and consumer goods. I believe this combination, together with our distinctive entrepreneurial culture, focused and lean operating structure, and efficient earnings model, will enable Coty to be a challenger in the beauty industry,” according to Pane, who in July was named to become Coty’s CEO once the deal closed. “We aim to relentlessly pursue superior products and solutions, build brands that inspire and enable consumers to celebrate and liberate their own individual beauty.”
The transaction was made as a Reverse Morris Trust, in which P&G split off the businesses to then be merged with a Coty subsidiary. Including stock retirement and debt proceeds, the deal represented a total value of approximately $11.4 billion, according to P&G.
“The completion of this transaction is a key step in our journey to return P&G results to a balance of strong top-line growth, bottom-line growth and cash generation,” stated P&G chairman, president and CEO David Taylor. “This effectively completes the major work we undertook two years ago to streamline and strengthen our product portfolio. We are now focused on 10 product categories and about 65 brands where P&G has leading market positions and where product technologies deliver performance differences that matter most to consumers.”
Under a business restructuring unveiled in November, Coty is now organized as three divisions: Coty Consumer Beauty, Coty Luxury and Coty Professional Beauty. Coty said the structure allows each division to focus on its respective category and channels, while enabling faster decision-making and better communication with customers and consumers.
Coty Consumer Beauty includes color cosmetics, retail hair coloring and styling products, body care and mass fragrances and focuses primarily in the mass retail channel with such brands as Adidas, Bourjois, Clairol, CoverGirl, David Beckham, Katy Perry, Max Factor, Rimmel, Sally Hansen and Wella.
Serving the luxury beauty market, including travel retail, is Coty Luxury, which focuses on prestige fragrances and skin care. Its fragrances include such brands as Marc Jacobs, Calvin Klein, Chloé, Gucci, Hugo Boss, Balenciaga, Bottega Veneta, Alexander McQueen, Davidoff and Miu Miu, while its skin care brands include Lancaster and philosophy.
Coty Professional Beauty serves salon owners and professionals in hair and nail care, covering all key salon segments and salon client needs. Its rands include Clairol Professional, Nioxin, OPI, Sebastian Professional, System Professional and Wella Professionals.
“Coty is now better-positioned as we aim to become, over time, a global industry leader by being a clear challenger in beauty, delighting our consumers and creating long-term shareholder value,” commented Coty chairman Bart Becht. “I am confident that we now have a much-improved team, structure and culture to make the vision of this merger a reality. I look forward to continuing to work with the new leadership team in my role as chairman to drive Coty to in-market success and profitable growth.”