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Beauty company Coty said on Friday it sold its remaining 25.8 percent stake in hair care brand Wella to KKR for $750 million, while retaining rights to a share of any future sale or initial public offering proceeds.
Coty said it is entitled to 45 percent of any proceeds from a sale or IPO of the business once KKR’s preferred return is met, adding that it plans to use most of the upfront cash to reduce its debt.
The sale also completes a programme launched in 2020 to streamline its portfolio and operations and to realise the full value of its Wella business, Coty added.
Earlier this year, Coty has launched a strategic review of its beauty business that could lead to the sale of brands such as Rimmel and CoverGirl, as it aims to refocus on its fragrances segment amid persistently weak demand for colour cosmetics.
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Shares of the company have lost nearly half of their value so far this year.
Founded in 1904 in Paris, Coty, which licenses the fragrance brands of Gucci, Chloe, and Burberry, has a market capitalisation of about $2.8 billion, according to LSEG data.
In 2015, Coty agreed to buy P&G’s beauty business for $12.5 billion, under which it acquired Wella.
By Shivani Tanna
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