Global beauty giant Coty Inc. has finalized its exit from the professional hair care market, announcing the sale of its remaining 9% stake in Wella to private equity firm KKR for approximately $426.5 million. The transaction marks the culmination of a multi-year strategic shift for Coty, allowing the company to sharpen its focus on its core prestige and consumer beauty portfolios.

A Strategic Unwinding

The deal represents the final chapter in Coty's separation from Wella, which began in 2020 when KKR initially acquired a majority 60% stake in the hair care and nail brands for $2.5 billion. Coty retained a 40% interest at that time, which it has been progressively selling down. This latest transaction fully severs Coty's ownership ties, providing a significant cash infusion to further strengthen its balance sheet and fund growth initiatives in its remaining business segments.

Focusing on Core Strengths

Under the leadership of CEO Sue Y. Nabi, Coty has been executing a strategic turnaround centered on its fragrance, cosmetics, and skincare lines, including powerhouse brands like Gucci Beauty, Burberry, and CoverGirl. The complete divestiture of Wella allows management to allocate all resources and attention toward accelerating growth in these core areas, particularly in high-margin prestige fragrances and expanding skincare offerings.

  • The sale generates roughly $426.5 million in immediate cash proceeds for Coty.
  • Coty's full exit enables a cleaner corporate structure and simplified operations.
  • KKR gains full ownership of Wella, which includes iconic brands like Clairol, OPI, and ghd.

Market analysts view the move positively, noting that the clean break from Wella eliminates a complex joint ownership structure and provides Coty with greater financial flexibility. The proceeds are expected to be used primarily for debt reduction, potentially leading to a credit rating upgrade, and for strategic investments in marketing and innovation for its core brand portfolio.