Last October, Coty announced its intention to sell its Professional Beauty business.

 The division includes major brands such as Wella, Clairol, Nioxin, Sassoon Professional, System Professional, the OPI nail brand and cult hair appliance player, ghd.

With earnings of US$1.8 billion in fiscal 2019, the lucrative arm accounts for 21 per cent of Coty’s total sales.

Major private equity firms such as Bain Capital, Clayton Dubilier & Rice, Advent International, Cinven and the Abu Dhabi Investment Authority showed early interest, even with a hefty price tag of US$7 to US$8 billion.

But all dropped out or were not chosen to proceed to the next round of bidding in mid-March.

The two major contenders in the second round of negotiations were Henkel, the German multinational and owner of Schwarzkopf, and KKR & Co, the US-based global investment giant.

But the COVID-19 pandemic has made both potential buyers wary of paying too much.

According to analysts, they are updating their due diligence to assess the impact of the coronavirus crisis on Coty’s Professional Beauty brands as hair and nail salons have been shuttered in most major markets.

Both multinationals are holding off from making firm bids as the pre-COVID-19 valuation of up to US$8 billion is now looking optimistic and likely to fall.

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