Top Companies Report

8. Coty

June 28, 2012

8. Coty

New York, NY
Sales: $4.1 billion.

Key Personnel: Bart Becht, chairman; Bernd Beetz, chief executive officer; Jules Kaufmann, senior vice president, general counsel; Geraud-Marie Lacassagne, senior vice president, human resources; Ralph Macchio, chief scientific officer, senior vice president, global research and development; Darryl McCall, executive vice president, operations; Sergio Pedreiro, chief financial officer; Michele Scannavini, president, Coty Prestige; Renato Semerari, president, Coty Beauty; Peter Shaefer, senior vice president, business development.

Major Products: Fragrances, skin care, color cosmetics marketed under such names as Adidas, Astor, Balenciaga, Beyoncé, Bottega Veneta, Calvin Klein, Celine Dion, Cerruti, Chloé, Chopard, CK One Color, David Beckham, Davidoff, Elite Models, Esprit, Faith Hill, Guess, Halle Berry, Heidi Klum, Jennifer Lopez, Jil Sander, Joop!, Jovan, Karl Lagerfeld, Kate Moss, Kylie Minogue, Lancaster, Madonna, Manhattan, Marc Jacobs, Miss Sporty, Nautica, Nikos, NYC New York Color, Nicole by OPI, OPI, Philosophy, Pierre Cardin, Playboy, Rimmel, Roberto Cavalli, Sally Hansen, Sarah Jessica Parker, Stetson, Tim McGraw, Tjoy, Tonino Lamborghini, Vera Wang, Vivienne Westwood.

New Products: Truth or Dare fragrance, OPI Holland nail enamel, Rimmel Scandaleyes mascara, Calvin Klein Color Cosmetics. To be launched: Monster, Lady Gaga’s new fragrance (Fall 2012).

Comments: Coty came calling, but the Avon Lady refused to come to the door. After Avon’s board outright rejecting an unsolicited $10 billion bid in April, Coty execs upped the ante to $10.7 billion. Less than a month later, Coty withdrew its second bid. In a letter to the Avon board, Coty said it was moving on to pursue other opportunities. If Avon had given a credible reason of why it needed more time, Coty would have considered agreeing to it, people familiar with the matter said. But after reaching out to various parties on the Avon side and receiving no reply, Coty decided to stick to its original deadline.

“(Avon’s) lack of engagement with us leads us to believe that you remain reluctant to explore a friendly, negotiated combination on a reasonable timetable,” Coty chairman Bart Becht wrote in the letter to Avon. “Two months is is time for Coty Inc. to move on.”

For its part, Avon issued the following statement:

“Avon Products responded promptly to Coty’s May 9th letter by disclosing it on May 10th and indicating that its Board would consider the contents of the letter. Subsequently on May 13th, Avon’s Board said it would respond to Coty’s letter within one week after considering it in conjunction with management and financial and legal advisors. On May 14th, five days after sending its letter, Coty withdrew its proposal.”

With that, Becht returned to the drawing board to mull his next move, which could include bringing Coty public. Coty Inc. has tapped Bank of America Merrill Lynch and J.P. Morgan Chase as lead underwriters for an initial public offering, which is expected to be priced this summer or early fall, people familiar with the matter said.

Nearly everyone agrees that Coty will continue to look for acquisitions. But few of the names that have emerged, including Perricone MD and Urban Decay, have a presence in emerging markets—something that made Avon very attractive to Coty in the first place.

Becht became Coty’s chairman in November, after a lengthy and successful career at Reckitt Benckiser. Coty is majority owned by Joh. A. Benckiser, which is also the largest shareholder of Reckitt Benckiser Group PLC.


Related End-User Markets: