On Sept. 30, 2016, P&G completed a split-off transaction whereby P&G provided its shareholders with the opportunity to exchange their shares of P&G common stock for Galleria Co. common stock. Effective October 1, 2016, Galleria Co. merged with a subsidiary of Coty and became a wholly owned subsidiary of Coty, whereby Galleria Co. common stock was converted to common stock of Coty Inc.
"The completion of this transaction is a key step in our journey to return P&G results to a balance of strong top-line growth, bottom-line growth and cash generation," said P&G Chairman, President and Chief Executive Officer David S. Taylor. “This effectively completes the major work we undertook two years ago to streamline and strengthen our product portfolio. We are now focused on 10 product categories and about 65 brands where P&G has leading market positions and where product technologies deliver performance differences that matter most to consumers.”
“I'm pleased with the timely, efficient and effective transition of these businesses. I want to share my personal thanks to all the employees who have transitioned to Coty,” Taylor added. “They showed amazing dedication during a period of uncertainty—demonstrating time and time again the strong character of P&G people. I thank them for everything they did during the transition and for all their years with P&G and wish them an exciting future with Coty.”
The Procter & Gamble Company commenced an exchange offer for 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.
This represents the next step in the proposed tax-efficient Reverse Morris Trust transaction with Coty Inc. revealed in 2015. 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 exchange and the merger are expected to be tax-free to participating P&G shareholders for US federal income tax purposes.
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