European Commission formally clears Coty’s acquisition of P&G beauty products businesses

The European Commission has today announced the unconditional clearance of Coty’s acquisition of the beauty products businesses of Procter & Gamble (P&G). Coty is a global beauty products manufacturer owned by the German holding company JAB. Frontier Economics advised Coty throughout the European Commission’s merger investigation.

The announcement follows the clearance decision in the US, and constitutes an important milestone for the worldwide approval of the transaction. Subject to approval in the remaining jurisdictions, the acquisition will make Coty the largest perfume supplier in the world, ahead of L’Oreal, and the third largest make-up provider in the world.

The Commission concluded during the Phase 1 merger investigation that the acquisition would not lead to an impediment to effective competition in the fragrances and colour cosmetics markets in Europe. The transaction allows Coty to add well-known brands such Mexx, Bruno Banani, Hugo Boss, Lacoste and James Bond to an already wide portfolio of fragrance brands including Adidas, Playboy, Calvin Klein, Davidoff, Marc Jacobs and Chloe. The Commission concluded that this overlap is unlikely to lead to higher prices for fragrances in Europe as consumers would continue to benefit from a large array of choices from strong rivals such as LVMH, L’Oreal, Puig, Unilever and Avon.  Similarly, the Commission concluded that Max Factor, the main cosmetic brand in the P&G portfolio, did not compete closely with Coty brands Rimmel, Bourjois, OPI and Sally Hansen, and that consumers would continue to rely on brands from other strong competitors such as L’Oreal and Cosnova.

Frontier regularly advises companies and regulators on issues relating to EU competition policy.

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