Unilever to sell perfume unit to Coty for $800m

Unilever is to sell its global perfume business to US-based Coty for $800 million (€637 million). It is the latest in a series of disposals aimed at restructuring the Anglo-Dutch group's consumer products business.

Coty will acquire the perfume licences for Calvin Klein, Cerruti, Vera Wang, Chloe and Lagerfeld, as well as a manufacturing and distribution centre in New Jersey and a distribution centre in Lille, France.

The Unilever Cosmetics International unit had sales of $600 million in 2004.

Unilever chief executive Patrick Cescau described the disposal as "an excellent strategic move... that is fully in line with our strategy to focus on our core categories".

Unilever wants to concentrate on its food, cleaning and personal care brands such as Knorr soups, Dove soap and Cif cleaning products.

Under the agreement, Unilever will receive further deferred payments depending on future sales.

Coty chief executive Bernd Beetz said the deal would reinforce Coty's position in Europe and the US, and "adds lots of clout for us in Asia".

"It is a deal that transforms the company," he said, noting that the addition of the Calvin Klein name gave Coty the type of broad, world-status brand missing from its fragrance range.

Mr Beetz sai'd the privately held company had courted Unilever about the fragrance business for some time.

The addition of brands such as Calvin Klein "really completes our portfolio," he said.

Coty currently markets Joop, Jennifer Lopez and Nikos, and has taken a lead in celebrity-endorsed perfumes, with Sarah Jessica Parker and David Beckham fragrances to be introduced this autumn.

Coty, a privately held subsidiary of Germany's Joh A Benckiser, had sales of $2 billion last year and Mr Beetz that said he expected sales of $2.7-$2.8 billion this year, boosted by the deal.

Benckiser bought the company from Pfizer, the US pharmaceuticals group, in 1992 for $440 million.

Coty, which is headquartered in New York, has been best known in recent years for the success of its partnership with Jennifer Lopez, prompting a resurgence in celebrity fragrances.

Unilever shares were up 1.9 per cent at 545.5p in London and 2 per cent higher at €53.90 in Amsterdam.

"They didn't get quite as much as you would have expected... I think the shares have rallied because they're at least showing some action," one analyst who declined to be named said.