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Neither Coty nor Procter & Gamble would confirm it, but multiple sources say that Coty will pay up to $12 billion to acquire two beauty units (Max Factor and Cover Girl) as well as P&G's hair care business, which includes Wella. P&G alerted Coty over the weekend that it had won the auction and has begun calling the losing bidders to inform them, sources said, cautioning that the outcomes could still change as the deals weren’t finalized.
Coty reportedly met with bankers in recent days about buying P&G’s divisions through a Reverse Morris Trust, a source said. Such a move would save P&G from paying capital gains taxes on the deal. Under such a move, P&G would sell just under a majority stake to Coty and let Coty run the combined operations. P&G tried a similar, tax-free sale of its Pringles brand recently but the deal with Diamond Foods collapsed.
For Coty Chairman Bart Becht, winning the P&G auction represents a homecoming of sorts. Becht held a variety of marketing, sales and finance positions at P&G before becoming CEO of RB from 1995 to 2011.
Coty reportedly met with bankers in recent days about buying P&G’s divisions through a Reverse Morris Trust, a source said. Such a move would save P&G from paying capital gains taxes on the deal. Under such a move, P&G would sell just under a majority stake to Coty and let Coty run the combined operations. P&G tried a similar, tax-free sale of its Pringles brand recently but the deal with Diamond Foods collapsed.
For Coty Chairman Bart Becht, winning the P&G auction represents a homecoming of sorts. Becht held a variety of marketing, sales and finance positions at P&G before becoming CEO of RB from 1995 to 2011.