The FINANCIAL — The Procter & Gamble Company on October 3 announced the completion of its Reverse Morris Trust transaction with Coty Inc., including the transfer of its global fine fragrances, salon professional, cosmetics and retail hair color businesses, along with select hair styling brands (collectively referred to as “P&G Specialty Beauty Brands”).
On September 30, 2016, P&G completed a split-off transaction whereby P&G provided its shareholders with the opportunity to exchange their shares of P&G common stock for Galleria Co. common stock. Effective October 1, 2016, Galleria Co. merged with a subsidiary of Coty and became a wholly owned subsidiary of Coty, whereby Galleria Co. common stock was converted to common stock of Coty Inc.
“The completion of this transaction is a key step in our journey to return P&G results to a balance of strong top-line growth, bottom-line growth and cash generation,” said David S. Taylor, P&G Chairman, President and Chief Executive Officer. “This effectively completes the major work we undertook two years ago to streamline and strengthen our product portfolio. We are now focused on 10 product categories and about 65 brands where P&G has leading market positions and where product technologies deliver performance differences that matter most to consumers.”
“I’m pleased with the timely, efficient and effective transition of these businesses. I want to share my personal thanks to all the employees who have transitioned to Coty,” Taylor added. “They showed amazing dedication during a period of uncertainty—demonstrating time and time again the strong character of P&G people. I thank them for everything they did during the transition and for all their years with P&G and wish them an exciting future with Coty.”
As part of the transaction, P&G retired 105.0 million shares of P&G stock, behind the exchange of 409.7 million shares of Galleria Co., which converted into common shares of Coty. At P&G’s closing stock price on Friday, September 30 of $89.75, these shares represent value of $9.4 billion. In addition, Galleria Co. assumed approximately $1.9 billion of debt in the transaction, the proceeds of which were subsequently distributed to P&G prior to the consummation of the split/merger. The combination of the stock retirement and debt proceeds results in a total value of approximately $11.4 billion, according to P&G.
Goldman, Sachs & Co. acted as financial advisor, Cadwalader, Wickersham & Taft LLP acted as tax counsel, and Jones Day acted as legal counsel to P&G.
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