Coty acquires leading cosmetic producer in Germany

Coty Inc, one of the world's largest fragrance and leading global beauty companies, and Kalina Group, a leading Russian cosmetic company, announced that Coty has entered into an agreement with Kalina to acquire 100% of the shares of Dr. Scheller Cosmetics AG and its subsidiaries (DSC), which are currently detained by Kalina.

The acquisition further enhances Coty Beauty's flourishing color portfolio through the addition of DSC's leading German makeup brand, Manhattan and its anti-acne cosmetic brand, Manhattan Clearface. With the addition of DSC's Manhattan products, Coty becomes the second largest player in the German color market.

Coty will leverage DSC's current distribution channels for its existing products including Astor, Rimmel and Esprit Cosmetics. With this acquisition, Coty's market share in the color cosmetics category in Germany will increase from 7 percent to 17 percent. Globally, the color cosmetics pillar will represent 25 percent of Coty's total portfolio. It also paves the way for Coty to achieve its goal of becoming a $7 billion beauty company by 2015.

"The acquisition of Dr. Scheller Cosmetics is a natural extension of our strategy to offer a well balanced portfolio of brands, representing some of the leading consumer products in Germany," said Bernd Beetz, CEO, Coty Inc. "Their well established brand, high-quality products, market presence and loyal consumers will complement and add value to Coty's existing offerings."

"We are proud of what we've been able to accomplish since acquiring Dr. Scheller Cosmetics AG, restructuring the company and bringing it to profitability," said Alexander Petrov, CEO of OJSC Concern "KALINA". "We are confident that the company will continue to grow under Coty's leadership. However, we will continue to maintain ownership of Dr. Scheller Das Naturkonzept product line, which we intend to grow as an international brand."

Financial terms of the transaction were not disclosed. The transaction is also subject to certain merger control approvals.