Coty enters £130m long-term exclusive global licence agreement with Burberry Beauty

US-based beauty firm Coty has entered into an agreement to purchase exclusive long-term global licence rights of Burberry Beauty luxury fragrances, cosmetics, and skincare for a cash consideration of £130m.

Under the agreement, the entire range of Burberry Beauty products will be developed, manufactured and distributed by Coty.

Upon closing the deal, Coty will buy around £50m of inventory from Burberry.

Coty's chief executive officer (CEO) Camillo Pane said: “We are proud to welcome Burberry as a strategic partner of Coty.

"We look forward to growing further Burberry’s luxury beauty products using Coty’s world-class expertise in developing and bringing to market beauty brands.”

Coty plans to manage the Burberry Beauty business at its Luxury division headquartered in Paris.

Burberry's chief creative and CEO Christopher Bailey said: "We are delighted to partner with Coty, a world leader in luxury fragrance and make-up.

"Working with a global partner of Coty’s scale and expertise will help drive the next phase of Burberry Beauty’s development and position this business for growth.”

Coty Luxury develops, produces, markets, and distributes a variety of fragrances such as Gucci, Marc Jacobs, Hugo Boss, Calvin Klein, Alexander McQueen, Bottega Veneta, and Balenciaga.

The division also includes the operations of cosmetics and skincare products, including philosophy, Lancaster, and Gucci brands.

The firms intend to leverage Coty’s capabilities in beauty strategy, innovation, supply chain, and go-to-market to deliver creative executions.

Burberry beauty's products will be available for purchase at select luxury beauty retailers, Burberry stores, and digital channels.

Expected to close in Q4 2017, the deal is subject to customary regulatory approvals.