Curbing to COVID-led crisis, cosmetic giant Coty agreed to sell a major chunk of its stake to private equity firm owner KKR. The Equity giant is betting big bucks on the beauty company that owns renowned brands like Kylie Cosmetics, Calvin Klien, Chloe and many others that could strike a $4.3 billion deal.
Owing to this deal, Coty will sell its preferred stock for $750 million giving the beauty company some liquidity to sustain in the times of COVID Pandemic.
In response to the exceptional measures announced in many countries to manage the Covid-19 public health crisis, Coty is adjusting the production of some of its manufacturing sites to be able to provide free of charge hydro-alcoholic gel to medical and emergency services, where this is needed by local authorities. We stay close to our communities during these exceptionally challenging times. #TakeCare #CotyCares
In addition to this, the two companies have also agreed upon to spin-off Coty’s beauty and hair business including its beauty and haircare brands like Sophie turner endorsed Wella and Clairol.
Wella and Clairol being famous for its shampoo and haircare products are one of the big brands that Coty owns. This would give the equity firm 60% ownership in the beauty company and will in turn help Coty to receive additional cash proceedings of $3 billion.
While many beauty and fashion companies are on the verge of declaring bankruptcy, Coty has played a smart move to survive in the business weathered by COVID-19. What are your thoughts on this?