Coty on track to clinch P&G beauty deal in coming weeks: sources
(This June 16 story has been refiled to fix typo in Procter in first paragraph)
By Astrid Wendlandt
PARIS (Reuters) - Coty (COTY.N: Quote) is on track to acquire Procter & Gamble's (PG.N: Quote) beauty business in a $12 billion deal that would make the U.S. cosmetic company the world leader in perfume and hair care, sources close to the matter said.
If the deal goes though, Coty would get its hands on brands such as Gucci and Hugo Boss perfume, Wella and Clairol hair care products and Max Factor and Cover Girl make-up, part of its strategy to reverse its own declining sales trends.
For P&G, the sale is part of a large plan to narrow its focus on fewer, faster-growing brands. The world's No. 1 household products maker said in August it could sell about half of its slow-growing brands over the next two years.
Coty was vying with Henkel (HNKG_p.DE: Quote) for P&G's hair care businesses and won an auction over the weekend, the sources said, adding that details of the complex transaction are likely to take at least two weeks to be finalised.
For tax purposes, the deal would be completed through a "Reverse Morris Trust", which means that P&G would spin off its beauty assets into a separate company that would then absorb Coty in an all-share deal, the sources said.
Luxembourg-based JAB Holdings, the billionaire Reimann family's investment firm which controls 75 percent of Coty, would own about a third of the equity in the combined business and about 47-48 percent of voting rights, the sources said. Continued...