EC approves Coty acquisition of P&G brands amid competition concerns

By Andrew MCDOUGALL

- Last updated on GMT

EC approves Coty acquisition of P&G brands amid competition concerns
Coty can breathe a sigh of relief now in Europe after the European Commission approved its acquisition of Procter & Gamble's beauty products businesses by Coty, under the EU Merger Regulation.

There had initially been concerns that the acquisition would reduce competition and lead to higher prices for these consumer goods in Europe, in particular for fragrances and colour cosmetics.

However following an investigation, the Commission concluded that “strong independent players would remain active in all the concerned markets.”

Last year it was announced that Coty would acquire 43 of P&G’s beauty brands​, predominantly in the fragrance, colour cosmetics, and hair care segments.

Obtaining the European Commission approval on this deal represents an important milestone for the transaction to proceed, with it already receiving regulatory approval in the US and several other required countries.

Moderate market share

The main areas of contention over the proposed merger were regarding the fragrance and colour cosmetics brands, as Coty is not currently active in the hair sector, so thus will not grow significantly or unfairly in this field.

In Fragrance, Coty already has a strong foundation as a leading player with popular brands such as Calvin Klein and Marc Jacobs and was adding the Alexander McQueen, Bruno Banani, Escada, Gabriela Sabatini, Gucci, Hugo Boss, James Bond 007, Lacoste, Mexx, and Stella McCartney brands from P&G.

Other companies that were considered as the main rival that could be affected included Avon, L'Oréal, LVMH, Puig, and Unilever; but the Commission found that the combined market shares would remain low to moderate in all affected markets, and that consumers will continue to have a large array of choices in fragrances from competitors.

The other big area in the European investigation was over colour cosmetics as Coty currently manages the Rimmel and OPI brands, among others, and was adding Max Factor from P&G.

Rivals such as Cosnova and L’Oréal stood to be the most affected, but again the Commission deemed Coty’s market share would remain moderate and that there would still be a large choice of products from competitors.

It adds that Coty's brands and Max Factor are not very close competitors, and that competition in these markets would remain sufficiently strong to prevent price increases for European consumers.

EC duty

The investigation took place as the Commission has a duty to assess mergers and acquisitions involving companies with a turnover above certain threshold and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

Most of the time mergers do not pose competition problems and are cleared after a routine review.

Coty remains on track to complete the merger in the second half of this calendar year, and says it will provide a more detailed timeframe during its third quarter fiscal 2016 earnings announcement in early May.

Related news

Related products

show more

Discover Peptan for Beauty & Diverse Skins

Discover Peptan for Beauty & Diverse Skins

Content provided by Rousselot | 05-Sep-2024 | Product Brochure

As beauty from within solutions soar in popularity, manufacturers need to be able to serve everyone, no matter their ethnicity or skin type.

FucoSkin®: Ocean-Inspired Sustainable Beauty

FucoSkin®: Ocean-Inspired Sustainable Beauty

Content provided by Hi-Q Marine Biotech International Ltd | 28-Aug-2024 | White Paper

FucoSkin® is a fucoidan-rich extract derived from the brown seaweed Laminaria Japonica, known for its excellent anti-aging and photoprotective benefits....

See our latest innovations in personal care

See our latest innovations in personal care

Content provided by Covation Bio™ PDO | 02-Apr-2024 | White Paper

At CovationBio PDO, we’re helping the world achieve its sustainability goals by enabling better performing, better-for-the planet products across a range...

Collagen Reimagined, Discover Biodesigned Type XXI

Collagen Reimagined, Discover Biodesigned Type XXI

Content provided by Geltor | 20-Mar-2024 | Product Brochure

Collagen is the body’s most abundant protein and a mainstream ingredient for beauty. Type XXI collagen transcends a common protein into a powerful bioactive

Related suppliers

Follow us

Products

View more

Webinars

Podcast