Coty to receive $400M to exit Gucci Beauty license early

Coty Inc. (NYSE: COTY) has agreed to transfer the Gucci Beauty license back to Kering approximately one year ahead of its original term, receiving roughly $400 million in total consideration, according to a company statement.

Coty received $250 million in cash at signing and will receive an additional $150 million no later than September 30, 2027, of which up to $30 million is contingent on certain criteria. Coty will continue to operate the Gucci Beauty brand through at least June 30, 2027. The company estimates cash taxes of approximately $30 million related to the transaction.

As part of the deal, Coty has agreed to sell Kering an amount of Gucci Beauty inventory sufficient to support the transition. The two companies also reached a mutual resolution of all pending litigation and related claims concerning the Gucci Beauty license.

Coty said it plans to use the proceeds for debt reduction, investment in its core prestige fragrance and beauty portfolio, and organizational restructuring to reflect the reduced scope of operations.

Markus Strobel, Executive Chairman and Interim CEO of Coty, said: "This agreement delivers a favorable outcome to conclude the Gucci Beauty license, enabling Coty to redeploy capital and focus on our priority brands."

Coty acquired the Gucci Beauty license in 2016 and has operated it for nearly a decade. The company said Gucci Beauty revenues grew more than 60% since 2019, driven by product lines including Gucci Flora, Bloom, Guilty, and Alchemist Garden.

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