The deal, which has Coty taking over the personal care and beauty business of Hypermarcas, was originally announced in November of last year and fell under scrutiny even after regulators had given it the go ahead.
Henkel petitioned the Brazilian regulatory group Cade to reconsider the deal and give particular attention to the hair care / hair color business. The competing beauty care company was concerned that Coty would have an unfair advantage in the Brazilian market if the deal went through. (A bit more on that from Cosmetics Design here.)
Coty, a publically traded company, picks up prominent Brazilian product lines in the acquisition, not the least of which are the personal care brand Monange, nail polish brand Risqué, men’s grooming line Bozzano, skin care brand Paixão, and popular hair color brand Biocolor.
“We are pleased to complete the acquisition of the Beauty Business of Hypermarcas, which will strengthen our presence in Brazil, the third largest beauty and personal care market in the world,” says Bart Becht, chairman and interim CEO of Coty, in a company statement to the press.
Production and logistics
It’s not just brands with demonstrated shelf appeal that Coty is buying, it’s a proven supply chain in a critical emerging market.
“The Beauty Business provides us with leading brands, state-of-the-art manufacturing and distribution facilities and strong go-to-market capabilities, and will be an important part of Coty’s portfolio going forward,” Becht tells the press.
Buying what works is a good strategy. Other prominent cosmetics and personal care companies—like Sephora—are thinking strategically about logistics in Brazil. And, proponents of new business and e-commerce in the country are pragmatic when it comes to shipping and infrastructural issues.
Coty is jockeying for a top spot in the global beauty business, and the Hypermarcas deal is only part of the company’s strategy for growth.
“Together with our expected merger with the P&G Specialty Beauty Business, [the Hypermarcas beauty business acquisition] is another step in our progression towards creating a pure-play global leader and challenger in Beauty,” affirms Becht.
The most recent news regarding Coty’s transaction with P&G entails ten fragrance brands, previously owned by P&G, consenting to the necessary license transfer. Those will be part of the Coty portfolio soon. However, Dolce & Gabbana and Christina Aguilera perfumes opted out and will be deaccessioned otherwise.