Procter & Gamble Inks Deal To Sell It’s Beauty Brands

Procter & Gamble Inks Deal To Sell It’s Beauty Brands

Procter & Gamble signed an agreement to combine its 43 beauty brands (RMT Brands) with Coty. The deal includes its global salon professional hair care and color, retail hair color, cosmetics, select hair styling brands, and fine fragrance businesses.

Play Quizzes 4

Transaction details

Procter & Gamble said the final decision regarding the form of the transaction had not been made. However, the company expects to do a split-off or spin-off transaction.

This Long/ Short Equity Firm Sees A Time-Arbitrage Opportunity In This Pest Control Merger

PestYost Partners was up 0.8% for the first quarter, while the Yost Focused Long Funds lost 5% net. The firm's benchmark, the MSCI World Index, declined by 5.2%. The funds' returns outperformed their benchmark due to their tilt toward value, high exposures to energy and financials and a bias toward quality. In his first-quarter letter Read More

Currently, Procter & Gamble prefers a Reverse MorrisTrust split-off transaction. Under this type of transaction, its shareholders have the option to participate in an exchange offer. They can exchange their P&G shares for Coty shares. Procter & Gamble shareholders have the option to exchange all, some or none of their shares.

Procter & Gamble would establish a separate entity to hold the RMT Brands if the transaction is executed as a split-merge. The new entity would be transferred to electing P&G shareholders in a tax-efficient transaction, and it would be merged simultaneously with Coty.

Procter & Gamble estimated that the value of the transaction was around $15 billion based on Coty’s current stock price, outstanding shares, and equity grants.

The transaction includes around 413 million shares or 52% of the diluted equity of the newly combined entity, valued at approximately $13.1 billion and the assumption of $1.9 billion debt by the entity holding RMT brands.

According to Procter & Gamble, the assumed debt will vary between $1.9 billion and $3.9 billion, subject ti other contractual valuation adjustments. It would be within the $22.06 to $27.06 per share collar based on the trading price of Coty’s stock before the close of the deal.

Procter & Gamble said the final value of the transaction would be determined at the closing based on Coty’s stock price, outstanding shares, equity grants, and the amount of assumed debt. The company expects to finalize the details of the deal over the next few months, and close the deal in the second half of 2016.

Procter & Gamble CEO says the deal is a significant step forward

In a statement, Procter & Gamble Chairman and CEO AG Lafley said the transaction represents a significant step forward. The company wants to focus on its portfolio on ten categories and 65 brands.

Lafley said, “We have leading global brand positions in these categories, consumer-preferred products and leading brands in the largest markets. These businesses and brands have historically grown faster and have been more profitable than the balance. We expect these ten categories to grow and create value as we focus the energy and resources of the company exclusively on them.”

Lafley added that Coty is a strategic acquirer, and it can provide a new, excellent home for the RMT brands and its employees.

Updated on

Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.
Previous article ACE Limited (ACE) is Acquiring Chubb Corp (CB)… What Should You Do?
Next article Pleasant Lake Partners Presentation On Magnachip

No posts to display