Procter & Gamble’s has begun preparing for the $12.5bn sale of its beauty business to Coty, which was announced last year.
At the end of last week, P&G said that it that it had commenced the separation of its global fine fragrances, salon professional, cosmetics and retail hair color businesses, along with select hair styling brands (collectively referred to as .P&G Specialty Beauty Brands’).
In the proposed split-off transaction, P&G will transfer the assets and liabilities of P&G Specialty Beauty Brands, other than specified excluded brands, to Galleria Co., a wholly owned subsidiary of P&G created to facilitate the transaction. Following
completion of the exchange offer, Galleria Co. will merge with a wholly owned subsidiary of Coty and become a wholly owned subsidiary of Coty.
The exchange offer provides P&G shareholders with the opportunity to exchange their shares of P&G common stock for shares of Galleria Co. common stock, which will convert into shares of Coty class A common stock upon completion of the merger.
The combined brands being sold generate annual sales of around $6bn and will more than double the size of Coty.
- The real issue is how these categories will respond to extra attention and focus when driven by Coty.
- Meanwhile, competitors in the other P&G categories can expect equivalent changes in relative competitive appeal.