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Coty, P&G Deal Receives European Regulatory Approval

Coty expects to close the transaction in the second half of 2016.

Coty Inc. received unconditional antitrust clearance from the European Commission to proceed with its acquisition of 41 beauty brands from Procter & Gamble, another step in the company’s deal-driven expansion.

Coty already received regulatory approval in the U.S. and several other countries for the transaction, which it expects to close in the latter half of 2016. Coty declined to comment beyond a company statement on the European regulatory approval.

When the $12.5 billion acquisition was initially announced in July, the plan was for Coty to add 43 brands from P&G, but in January Dolce & Gabbana fragrances and Christina Aguilera Perfumes dropped out of the transaction. Coty will still add fragrance licenses for Hugo Boss, Gucci, Lacoste, Bruno Banani, Escada, Mexx, James Bond, Gabriela Sabatini, Stella McCartney and Alexander McQueen through the deal.

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From P&G, Coty is expected to add Wella Professionals (and sub-brands), Sebastian Professional, Clairol Professional, Sassoon Professional, Nioxin, SP, Koleston, Soft Color, Color Charm, Wellaton, Natural Instincts, Nice ‘n Easy, VS Salonist, VS ProSeries Color, Londa/Kadus, Miss Clairol, L’Image, Bellady, Blondor, Welloxon, Shockwave, New Wave, Design, Silvikrin, Wellaflex, Forte, Wella Styling, Wella Trend, Balsam Color, Max Factor and Cover Girl.

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Even outside of the P&G beauty merger, Coty has been on a transaction tear. The company closed a $1 billion deal in February for beauty brands from Brazil-based Hypermarcas. That deal adds manufacturing, logistics and management capabilities in the region. Coty has also signed a fragrance licensing agreement with Tiffany’s, picked up digital marketing firm Beamly and acquired Bourjois from Chanel.

The P&G deal is driving reorganization efforts at the business. Coty is realigning itself into three segments: The Coty Luxury Division will contain prestige fragrance and skin care; the Coty Consumer Beauty Division will house color cosmetics, retail hair coloring and styling products and mass-market body care; and the Coty Professional Beauty will service hair and nail salon owners.

Costs incurred from the transactions and subsequent reorganization are adding up. For the six months ended Dec. 31 Coty incurred $72.7 million in restructuring costs, mostly from an acquisition integration program, and $46.6 million in charges related to acquisition activities for the quarter ended Dec. 31, the company released.