Coty announced on Friday, December 19, that it had sold the remainder of its stake (25.8%) in the capital of the hair care brand Wella to KKR for $750 million, while retaining a right to 45% of the proceeds of a future sale or IPO.
The group that owns the Rimmel and Max Factor brands plans to use most of the funds from this transaction to reduce its debt.
« This transaction marks a crucial step for Coty, both in our transformation strategy and in terms of long-term debt reduction “, declared Laurent Mercier, the group’s financial director.
Coty bought Wella from Procter & Gamble in 2015 in a $12.5 billion deal that included much of P&G’s beauty business. Faced since with strong competition and significant debt, Coty has seen its stock price weaken, forcing management to simplify the group’s brand portfolio.
Earlier this year, the group launched a strategic review and considered selling its consumer makeup brands in order to refocus on the fragrance segment.
Last week, the Financial Times claimed that the group’s majority shareholder, JAB Holding, was planning a management restructuring at Coty that could result in the departure of the chairman of the board as well as the chief executive.
