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Coty to sell 9% stake in Wella to majority owner KKR

Published 10/01/2021, 07:28 AM
Updated 10/01/2021, 07:30 AM
© Reuters.
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(Reuters) - Coty (NYSE:COTY) Inc said on Friday it would swap around 9% of its stake in professional beauty business Wella with KKR & Co (NYSE:KKR) Inc for some of the cosmetic maker's shares the U.S. buyout firm owns, valuing the deal at $426.5 million.

The deal cuts Coty's stake in Wella to around 30.6%, valued at about $1.38 billion. The CoverGirl cosmetics maker sold a 60% stake to KKR for about $2.5 billion in December last year, with its remaining 40% stake valued at $1.3 billion at the time.

Coty said the value of Wella has increased since the closing of the majority stake sale, as reopening of salons across the globe has sparked a recovery in the business.

© Reuters. FILE PHOTO: CoverGirl cosmetics owned by Coty Brands are shown for sale in a retail store in Encinitas, California, U.S., November 8, 2017. REUTERS/Mike Blake

The deal, which is expected to close in the second quarter of Coty's fiscal 2022, will also help the Gucci fragrance maker simplify its capital structure and save $52 million annually, while also boosting its profits.

KKR's ownership in the Hugo Boss fragrance maker would reduce to the equivalent of about 45 million Coty Class A shares, representing a stake of about 5.2%.

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