Coty Announces Acquisition of Germany-based Dr. Scheller Cosmetics

Coty Inc. and Kalina Group 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) currently held by Kalina. The acquisition further enhances Coty Beauty's color portfolio through the addition of DSC's 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% to 17%. Globally, the color cosmetics pillar will represent 25%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.

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