USA: Coty completes divestment of Wella

Coty, the American beauty multinational, has finalised the sale of its remaining 25.8% stake in haircare brand Wella to the global investment firm KKR.

Under the terms of the agreement, Coty will receive an upfront cash payment of $750 million. Furthermore, the company retains the right to 45% of any future proceeds from a potential initial public offering (IPO) or subsequent sale of the business, once KKR’s preferred return threshold is met. The transaction concludes a multi-year divestment programme initiated in 2020 to simplify Coty’s operations and refocus on its core prestige fragrance and consumer beauty divisions.

Laurent Mercier, chief financial officer at Coty, stated: “This transaction marks a pivotal milestone for Coty – both in our transformation and in our long-running deleveraging commitment. We have benefited from Wella’s strong growth by progressively monetising our stake, allowing us to strengthen Coty’s financial foundations year-after-year”.

The company intends to use the majority of the proceeds to pay down short-term and long-term debt, aiming to reduce its net leverage to approximately 3x by the end of 2025. Coty originally carved out Wella into a standalone entity in a strategic partnership with KKR following its earlier acquisition of the brand from P&G.

Source: Coty / Beauty Packaging / Cosmetics Business