Coty buys up Unilever fragrance business

Related tags Celine dion

US fragrance player Coty says it has entered into an agreement to
purchase the global fragrance business of Anglo-Dutch consumer
giant Unilever for an estimated $800 million. The move boosts
Coty's fragrance brand portfolio, with names such as Calvin Klein
and Chloe giving the company even greater prominence, reports
Simon Pitman.

The purchase also gives Coty​ the rights to brands such as Lagerfeld, Vera Wang and Cerutti, helping to make it one of the biggest global fragrance players. The privately held company is aiming to rank as one of the five biggest beauty consumer companies in the world.

On a regional basis it will help Coty boost its operations outside the North American market, giving a particular boost to both its European and its Asian activities.

The company said that with the estimated $600 million in annual sales from Unilever's fragrance business, it has now made a major step towards achieving that goal. In an interview with AP Coty chief executive Bernd Beetz said that the transaction had put the company on 'a higher level'.

"Today's acquisition represents an important further step in the transformation of Coty that began in 2001,"​ said Beetz in an official statement. "Over the last several year's Coty's success with fashion celebrity and lifestyle fragrances has enabled us to grow when most of our industry has been flat or shrinking. We are now entering a new phase in which we will greatly expand our presence in the market for prestige and ultra-prestige brands on a global basis."

With the global fragrance industry still be characterized by high levels of fragmentation, the move will also put the company in a good position to make further moves at consolidating the industry as well as winning itself greater purchasing power by capitalizing on existing synergies.

Likewise the move is seen is a significant step for Unilever​ to build on its core capabilities, which centre on food and personal care. In recent years the company has been trimming back its portfolio diversity in an effort to become more competitive, primarily against Proctor and Gamble in the personal care sector, and Kraft in the food sector.

The deal has been on the cards for some years, so there were no surprises for the financial world. However, a number of analysts did say that price tag had been slightly above expectations.

In addition to the perfume licensing agreement, the deal will also extend Coty's manufacturing capabilities in the US with the acquisition of Unilever's Mt. Olive, New Jersey, facility, together with a distribution centre in Lille, Northern France.

The newly acquired fragrance brands will become a part of the Coty's Lancaster Group Worldwide, the company's prestige division.

Fragrance brands such as Celine Dion and adidas have been built up to make Coty a major fragrance player in recent years. In recent months the company has signed international pop star to Celine Dion to promote another perfume line, on top of signing media figures David and Victoria Beckham to promote perfume lines.

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