09.28.15
When its beauty deal with Coty is completed, Procter & Gamble will be focused on 10 categories and about 65 brands. These categories are:
- baby care
- feminine care
- family care
- fabric care
- home care
- hair care
- skin care and personal cleansing
- grooming
- oral care
- personal health care
Earlier this year, Coty agreed to acquire 43 of Procter & Gamble’s beauty brands in a complicated deal valued at $12.5 billion. The agreement, a Reverse Morris Trust (RMT) transaction, includes P&G’s global salon professional hair care and color, retail hair color, cosmetics and fine fragrance businesses, along with select hair styling brands. The acquisition doubles the size of Coty, creating a $10 billion player in the global beauty industry. The acquisition includes leading fragrance brands such as Hugo Boss, Dolce & Gabbana and Gucci and the color cosmetics brands CoverGirl and Max Factor. The transaction also gives Coty an attractive new category in the beauty industry through the addition of P&G’s hair color business, led by Wella and Clairol.
But the sale to Coty does more than clear out P&G's closet, it should make it easier for retailers to do business with P&G as well. For example, P&G introduced the use of hard tags to make it easier for consumers to shop as well as to help retailers move out of stock boxes on shelves and at checkout. Furthermore, P&G plans to move production closer to its major consumer populations and distribution hubs. P&G is currently in the middle of constructing 25 new manufacturing plants and production modules, out of which 18 are in developing countries, according to Moeller.