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Coty Inc. acquires beauty product lines from P&G for $12B

Coty Inc., the beauty products and fragrance manufacturer, has won an auction to purchase two related businesses from Procter & Gamble, The Post has learned.

Coty, whose stable of products includes Calvin Klein and Marc Jacobs fragrances and New York Color cosmetics, has also won a third auction — for P&G’s hair-care lines, which includes its Wella brand — that will expand its business into that category, sources familiar with the deal believed.

The value of the three deals could reach $12 billion, sources added. Coty, with a stable of brands, can achieve savings through synergies that other bidders, like private-equity firms, are unable to do.

Coty for years has been acquiring brands waiting for the chance to join the big leagues in the consumer space. Winning the P&G auctions would catapult Coty into a much larger playing field.

“It’s rare you have brands of this size coming to market,” said one banker who knows Coty well.

P&G put the three business lines, including its Max Factor and CoverGirl brands, on the block earlier this year to concentrate on its core operations.

P&G alerted Coty over the weekend that it had won the auction and has begun calling the losing bidders to inform them, sources said, cautioning that the outcomes could still change as the deals weren’t finalized.

Coty, when including debt and equity, is worth $12 billion. It has spoken to bankers in recent days about buying P&G’s divisions through a Reverse Morris Trust, a source said.

Such a move would save P&G from paying capital gains taxes on the deal. Under such a move, P&G would sell just under a majority stake to Coty and let Coty run the combined operations.

P&G tried a similar, tax-free sale of its Pringles brand recently but the deal with Diamond Foods collapsed.

For Coty Chairman and Interim CEO Bart Becht, winning the P&G auction would be something of a homecoming.

Becht held a variety of marketing, sales and finance positions at P&G before becoming CEO of Reckitt Benckiser, a leading British global consumer goods company, from 1995 to 2011.

P&G and Coty both declined comment.