Coty has announced the signing of a definitive agreement to merge The Procter & Gamble Company’s (NYSE: PG) fine fragrance, colour cosmetics, and hair colour businesses into Coty through a tax-free Reverse Morris Trust transaction. The transaction is based on a proposal by Coty valuing the P&G Beauty Business at approximately $12.5 billion at the time the proposal was made.  Following the transaction, P&G shareholders will own 52% of all outstanding shares on a fully diluted basis (inclusive of all outstanding equity grants), while Coty’s existing shareholders would own 48% percent of the combined company. P&G’s businesses include fragrance brands such as Hugo Boss, Dolce & Gabbana and Gucci and the colour cosmetics brands COVERGIRL and Max Factor. The transaction also gives Coty a new category in the beauty industry through the addition of P&G’s hair colour business, led by Wella and Clairol.  The transaction will significantly expand Coty’s geographical footprint, providing scale in large beauty markets like Brazil and Japan, while also increasing critical mass in important geographies in which Coty currently operates, such as in North America, Europe, the Middle East and Asia. 

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