Coty to buy Unilever's fragrance business

Tina Milton

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The $800m purchase will transform the duty-free beauty landscape

Unilever has agreed to sell its prestige fragrance division to US fragrance group Coty Inc for a cash sum of $800m, with further payments possible depending on brand performance. Unilever is the producer under licence of brands such as Calvin Klein, Cerruti and Chloé. Last year the fragrance division recorded sales of just over $600m.

A manufacturing and distribution base in New Jersey and a logistics centre in France are included in the deal. "This is an excellent strategic move for Unilever and one that is fully in line with our strategy to focus on our core categories," chief executive Patrick Cescau said in a statement.

Coty, one of the world's largest fragrance and cosmetics manufacturers, markets brands such as Joop, Adidas, Davidoff and Rimmel Cosmetics. Last year the company posted sales of $2bn.

Reports indicate that the new fragrances will become part of Lancaster Group, which is managed by president Michele Scannavini. The Lancaster Group recently secured the licencing deals to produce fragrances for Sex in the City star Sarah Jessica Parker and Victoria and David Beckham.

"We are now entering a phase in which we will greatly expand our presence in the market for prestige and ultra-prestige brands on a global basis," Coty chief executive Bernd Beetz said in a statement.