Coty paid $12B for P&G's beauty brands — then wrote off billions and sold the crown jewels

Coty was a century-old fragrance and cosmetics company, best known for brands like Calvin Klein, Marc Jacobs, and philosophy. In 2015 it struck a deal to acquire 41 beauty brands from Procter & Gamble — including Clairol, CoverGirl, Max Factor, Wella, and the licenses for Gucci, Hugo Boss, and Lacoste fragrances — in a transaction valued at roughly $12 billion. The deal was structured as a Reverse Morris Trust and made Coty the third-largest global cosmetics company overnight.

The acquisition was funded almost entirely with debt. Coty's balance sheet ballooned, and the company immediately faced severe integration challenges. The P&G brands had been run inside a massive consumer-goods machine with completely different systems, supply chains, and corporate culture. Coty's quarterly profit fell sharply, and by August 2017 the company was reporting losses. Its stock price, which had traded around $30 before the deal, slid below $10 by 2019.

In 2018, Coty was forced to undertake an $8 billion jumbo refinancing to manage its debt load. The company attempted a turnaround under new leadership, but the damage was already done. In December 2020, Coty sold Wella, Clairol, OPI, and ghd to private equity firm KKR for $2.5 billion in cash — a fraction of what it had paid for the broader portfolio just four years earlier. Coty retained a 40% stake, which it further reduced in 2021.

The sale effectively ended Coty's experiment as a mega-cosmetics house. The company refocused on its core fragrance and prestige business, but the P&G acquisition had consumed years of management attention, destroyed billions in shareholder value, and left the company permanently smaller than it had aimed to be.