Coty corrals pricey P& G trio: sources

Coty Inc., the beauty products and fragrance manufacturer, has won an auction to purchase two related businesses — Max Factor and Cover Girl — 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 haircare lines, which include its Wella brand— sources said, a move that will expandits business into that category.

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, such as privateequity firms, are unable to attain.

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 personalcare business lines 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 operations.

Both P& G and Coty declined to comment.