More attention for emerging markets
The purchase should help Coty become less dependent on its perfume sales, which represented half of the company’s 2014 turnover and should also help it tap into new regions. The perfume-focused part of the deal will help Coty become the world’s largest player in the perfume branch.
Adding Wella and Clairol to its product range will push Coty into 5th position when it comes to hair care products. Procter & Gamble, L’Oréal and Unilever make up the top 3 in that branch, but Coty is lagging far behind those three, particularly in emerging markets.
Previously, Coty invested a lot in established markets and not so much in the emerging markets, but this deal should alleviate that problem somewhat: Wella’s largest market is Latin America, worth 38 % of the brand’s 2014 turnover.
