Coty and Procter & Gamble ("P&G") are both US manufacturers of beauty products. Their main products are fragrances, colour cosmetics and skin & body products.
The Commission investigated whether the acquisition would reduce competition and lead to higher prices for these consumer goods in Europe, in particular for fragrances and colour cosmetics.
The Commission's investigation
Coty's main fragrance brands are adidas, Calvin Klein, Chloé, Davidoff, Marc Jacobs and Playboy. P&G is selling to Coty the following brands: Alexander McQueen, Bruno Banani, Escada, Gabriela Sabatini, Gucci, Hugo Boss, James Bond 007, Lacoste, Mexx and Stella McCartney. The Commission found that the combined market shares would remain low to moderate in all affected markets. Moreover, consumers will continue to have a large array of choices in fragrances after the merger from significant competitors, such as Avon, L'Oréal, LVMH, Puig, Unilever and others.
Coty's best-known branded colour cosmetics products are Bourjois, OPI, Rimmel and Sally Hansen. The main brand P&G is selling to Coty is Max Factor. The Commission found that the combined market shares would remain moderate in all affected markets. Consumers will continue to have a large choice of colour cosmetics from significant competitors, such as Cosnova and L'Oréal. Moreover, Coty's brands and Max Factor are not very close competitors.
The Commission therefore concluded that competition in these markets would remain sufficiently strong to prevent price increases for European consumers.
Companies and products
Coty is a global beauty products manufacturer. Its main products are fragrances, colour cosmetics and skin & body care products. Coty is currently not active in hair products.
The Procter & Gamble Company is a global manufacturer of consumer goods, including fabric and household care, beauty care, grooming, health care, baby, feminine and family care products. The businesses sold to Coty manufacture and distribute globally colour cosmetics and fragrances, hair colouring and styling products.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).