On December 19, 2025, Coty Inc. (NYSE: COTY), a global leader in the beauty industry, announced the successful sale of its remaining 25.8% stake in Wella, a renowned beauty brand, to KKR-managed capital accounts and investment affiliates. This landmark transaction signifies a pivotal moment in Coty’s ongoing transformation and commitment to deleveraging its balance sheet.

2. Financial Details of the Transaction

Coty will receive an upfront cash payment of $750 million from KKR. In addition, the company will benefit from 45% of any future proceeds resulting from an additional sale or initial public offering (IPO) of Wella, contingent upon KKR meeting its preferred return. Coty’s leadership anticipates that, based on Wella’s robust performance and favorable market valuations, there is significant potential for further cash proceeds. This could enhance the overall gross proceeds, aligning closer to the carrying value of Coty's original investment in Wella.

“*This transaction marks a pivotal milestone for Coty – both in our transformation and in our long-running deleveraging commitment,*” stated Laurent Mercier, Coty’s Chief Financial Officer. He emphasized the value of the strategic partnership with KKR, highlighting the benefits Coty has gained from Wella’s growth through this phased monetization.

3. Use of Proceeds and Financial Implications

Coty has indicated that the majority of the cash proceeds from the Wella transaction will be allocated towards reducing both short-term and long-term debt obligations. Coupled with a strong free cash flow generation of over $350 million in the first half of FY26, the company expects to reduce its financial net leverage to approximately 3x by the end of calendar year 2025. This move is part of Coty's broader strategy to enhance its financial health and operational efficiency.

4. Completing the Divestment Strategy

The sale marks the culmination of a divestment strategy initiated by Coty in 2020, aimed at simplifying its portfolio and operations while maximizing the value of its non-core assets. The successful completion of this transaction aligns with Coty’s original goal to fully divest from Wella by the end of 2025, illustrating the company’s commitment to its financial targets and strategic focus.

5. Advisory Roles in the Transaction

In connection with the sale, Citi has been appointed as the financial advisor, while Skadden, Arps, Slate, Meagher & Flom LLP serves as legal counsel for Coty. Simpson Thacher & Bartlett LLP is providing legal advice to KKR, ensuring that all aspects of the transaction are thoroughly managed.

6. Looking Ahead

As Coty moves forward, the company’s leadership remains optimistic about the future. With a redefined focus on its core beauty brands and strengthened financial footing, Coty is poised to navigate the competitive landscape effectively. The successful divestment from Wella not only enhances Coty’s balance sheet but also allows the company to invest further in its strategic initiatives aimed at driving growth and profitability.

7. About Coty Inc.

Founded in Paris in 1904, Coty is one of the world’s largest beauty companies, renowned for its diverse portfolio that spans fragrances, color cosmetics, and skincare. Operating in over 120 countries, Coty is committed to empowering consumers to express their unique visions of beauty while prioritizing sustainability and environmental responsibility.

As Coty continues to evolve, the completion of this transaction represents not just a financial maneuver, but a strategic step towards a more focused and resilient future.

Original press release