P. & G. Sess 43 Beauty Brands to Coty

http://www.nytimes.com/2015/07/10/business/dealbook/pg-sells-43-beauty-brands-to-coty.html?_r=0

9 July 2015, P. & G. announced their divestment of a portfolio containing 43 beauty brands to Coty for $12.5bn. Included within this deal are fragrances from Gucci and Dolce & Gabbana.

P. & G.’s recent strategy of divestment will enable it to focus on a core range of products to globally increase revenues and profitability, this article refers to the Duracell divestment in the latter part of 2014.

Any comment of divestment from a portfolio of products should scream Boston Consulting Group Matrix to any CIMA student!

Within the Scent scenario you should be prepared to discuss the impact of acquiring new brand names to compliment Scent’s existing fragrance portfolio, increasing revenue and market share. A well prepared candidate would also consider the financial reporting issues that could arise as a result, for example the requirement to prepare consolidated financial statements or accounting for intangible assets and the performance management issues including a NPV computation to evaluate such a proposed investment.

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