Wedoany.com Report-Dec.20, Coty Inc. announced on December 20, 2025, that it has divested its remaining 25.8% stake in the Wella hair care brand to KKR for $750 million. The transaction allows Coty to retain rights to a portion of potential future proceeds from any sale or initial public offering of the business.

Under the agreement, Coty will receive 45% of any proceeds generated from a future sale or IPO once KKR achieves its preferred return threshold. The company stated that it intends to allocate the majority of the immediate cash proceeds toward reducing its outstanding debt.

This disposal marks the completion of a multi-year initiative begun in 2020 to simplify Coty's portfolio, optimize operations, and fully realize the value embedded in its investment in Wella.

Earlier in 2025, Coty initiated a comprehensive strategic review of its professional and consumer beauty divisions. This evaluation explores options that may include the divestiture of certain makeup brands, such as Rimmel and CoverGirl, enabling a sharper focus on the higher-performing fragrance category amid ongoing softness in demand for color cosmetics.

Investor sentiment has reflected these challenges, with Coty shares declining nearly 50% in value during the year. The company currently holds a market capitalization of approximately $2.8 billion, based on data from LSEG.

Established in Paris in 1904, Coty has built a strong presence in prestige fragrances through licensing agreements with renowned names including Gucci, Chloe, and Burberry. Its entry into the professional hair care segment came through the 2015 acquisition of Procter & Gamble's beauty operations for $12.5 billion, which brought the Wella brand into its portfolio.

The latest transaction concludes Coty's gradual exit from Wella ownership, following previous partial sales that progressively reduced its stake. By partnering with KKR, a firm experienced in managing consumer and retail assets, Coty positions the brand for continued development while securing capital for balance sheet improvement.

Financial analysts view the deal as a positive step in Coty's transformation efforts, providing liquidity to address leverage concerns and supporting strategic realignment toward core strengths in fragrance and premium segments. The retained upside participation offers potential for additional value realization should Wella achieve further milestones under its new ownership structure.

Overall, this development represents a milestone in Coty's ongoing evolution, enhancing financial flexibility and concentrating resources on areas demonstrating greater growth potential within the competitive global beauty market.