Coty Offloads Its Remaining Wella Ownership to KKR in $750 Million Deal

Coty Inc. (COTY) has completed a major portfolio restructuring by divesting its remaining 25.8% ownership stake in Wella to investment firms managed by KKR for $750 million in upfront cash. This transaction marks the final chapter of Coty’s asset simplification initiative that began in 2020, with the company strategically reducing its exposure to non-core businesses.

Beyond the immediate cash payment, the deal includes an interesting upside provision: Coty will receive 45% of proceeds from any future Wella exit event—whether through acquisition or public markets—once KKR achieves its preferred return threshold. This structure allows Coty to benefit from potential value creation while stepping away from active management.

The divestiture represents a significant de-leveraging opportunity for Coty. The company intends to deploy the majority of sale proceeds toward paying down both short- and long-term debt obligations. According to the deal terms, this capital redeployment, combined with robust free cash flow generation, is projected to reduce the company’s net leverage ratio to approximately 3x by the end of 2025—a meaningful improvement in financial health.

Market response to the announcement has been measured. On Thursday, Coty shares closed at $3.2500 on the New York Stock Exchange, reflecting a modest decline of $0.3067. After-hours trading showed slight recovery momentum, with the stock advancing $0.01 to settle at $3.2600, suggesting cautious investor interest in the leveraged position reduction strategy.