Coty said on Friday, December 19, that it has sold its remaining 25.8% stake in haircare brand Wella to KKR for USD 750 million, while retaining the right to 45% of any proceeds from a future sale or initial public offering.
The owner of Rimmel and Max Factor said most of the proceeds would be used to pay down debt.
“This transaction marks a pivotal milestone for Coty – both in our transformation and in our long-running deleveraging commitment,” commented Laurent Mercier, Coty’s CFO.
Coty acquired Wella from Procter & Gamble in 2015 as part of a USD 12.5 billion deal for a large portion of P&G’s beauty business. Since then, intense competition and a heavy debt burden have weighed on Coty’s share price, prompting management to streamline the group’s brand portfolio.
Earlier this year, the group undertook a strategic review and weighed selling its mass-market makeup brands to sharpen its focus on perfumes.
Last week, the Financial Times reported that the group’s controlling shareholder, JAB Holding, was planning a leadership overhaul that could result in the exit of both Coty’s board chair and CEO.
