Coty’s Cosmetics Cleanup: Trimming the Wella Stake

Coty’s Cosmetics Cleanup: Trimming the Wella Stake

THE WHAT? Coty Inc. is selling a portion of its Wella stake to IGF Wealth Management. The deal involves a 3.6% stake in Wella, which Coty sells for $150 million.

THE DETAILS? The sale is subject to due diligence and approval from Kohlberg Kravis Roberts & Co. L.P. Once the transaction is completed, Coty will hold a 22.3% stake in Wella, valued at about $900 million. This sale is part of Coty’s broader strategy to reduce its debt, targeting a leverage ratio 3x by the end of CY23.

THE WHY? Coty’s CFO, Laurent Mercier, sees this sale as a strategic move to improve Coty’s financial standing. The company aims to fully divest its remaining Wella stake by CY25, working towards a 2x leverage ratio. This approach is supplemented by planned share buybacks and business expansion.

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