Coty, the USA-based beauty company, has entered into an agreement to transition the Gucci Beauty license back to Kering for a consideration of approximately $400 million. Under the terms of the agreement, Coty will continue to operate the Gucci Beauty brand until at least 30th June 2027, ending the license approximately one year ahead of the original license term.
As part of the agreement, Coty received $250 million in cash at signing and will receive an additional $150 million no later than 30th September 2027. Of this additional amount, up to $30 million is contingent on certain criteria.
The company has also agreed to sell to Kering an amount of Gucci Beauty inventory sufficient to support the transition. Furthermore, Coty and Kering have agreed to a mutual resolution of all pending litigation and related claims concerning the Gucci Beauty license.
Markus Strobel, Executive Chairman and Interim CEO of Coty, said: “This agreement delivers a favorable outcome to conclude the Gucci Beauty license, enabling Coty to redeploy capital and focus on our priority brands. It recognizes the substantial value created in Gucci Beauty under our stewardship and enhances our financial flexibility”.
Coty originally acquired the Gucci Beauty license in 2016. The transaction proceeds will be used to support debt reduction, investment in its core prestige fragrance and beauty portfolio, and organizational optimization to reflect the new scope of the business.
Source: Coty (via BusinessWire)
