Coty Agrees to Buy P&G Beauty Brands for $12.5B

Coty Inc. agreed to buy 43 of Procter & Gamble Co.'s beauty brands for about $12.5 billion in a deal that would more than double its sales and transform it into one of the world’s largest cosmetics companies.

The transaction will be conducted as a Reverse Morris Trust, meaning P&G will spin or split off the business, which will then merge with a Coty subsidiary, the companies said in statements July 9. The arrangement is meant to reduce taxes for the companies’ shareholders.

The acquisition will add Hugo Boss and Gucci to Coty’s fragrances offerings and CoverGirl and Max Factor ...