Coty rumored to be in negotiations to buy OPI

By Simon Pitman

- Last updated on GMT

Related tags: Dr. scheller cosmetics, Celine dion, Coty

Fragrance-maker Coty is thought to be in serious negotiations to buy up skin care and nail polish experts OPI Products, according to a Bloomberg report.

Two sources with close knowledge of the negotiations spoke to Bloomberg, stating their belief that the acquisition discussions are now very serious and that the deal could value OPI at as much as $1bn.

However, the report stated that at this stage of the negotiations, nothing has yet been finalized, which means that the deal could still fall through, or else a rival bidder could also step into the talks.

OPI specializes in own-brand nail polish and is one the major suppliers to salons in North America, while also having a significant presence in the hand-and-foot care as well as the body lotion segments.

The company has annual sales of approximately $300m and is based in Hollywood, California.

Branching out from fragrance

The foundations for the Coty business are very much built around celebrity and designer perfumes, with the business brokering highly lucrative sponsorship deals to build up a portfolio that includes names such as Sarah Jessica Parker, Celine Dion, Esprit and Calvin Klein.

The success of the fragrance sponsorships means its fragrance division now accounts for approximately 65 per cent of its estimated $4.5bn yearly revenues, making it the world’s largest fragrance manufacturer.

However, in recent years the company has been concentrating its efforts to expand outside of the fragrance arena, and into other key personal care areas, including skin care and color cosmetics.

Acquisition of Dr. Scheller Cosmetics

Last week Coty announced the acquisition of German color cosmetics player Dr. Scheller Cosmetics from Russia-based Kalina, in a move aimed at diversifying its portfolio by increasing the size of its operations in this category.

With this acquisition, Coty's market share in the colour cosmetics category in Germany will increase from 7 per cent to 17 per cent.

Globally, the colour cosmetics pillar will represent 25 per cent of Coty's total portfolio. According to the beauty and fragrance firm, it also paves the way for Coty to achieve its goal of becoming a $7bn (€5.1bn) beauty company by 2015.

Related topics: Market Trends

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