The Rising Influence of Rising Affluence

[DewDiligence]

PG to use tax-free mechanism to divest beauty business:

http://www.wsj.com/articles/procter-gamble-agrees-to-sell-beauty-businesses-1436444762

The deal’s structure hasn’t been completed yet, but P&G expects to do a split-off or spinoff transaction. The company said it would prefer to do what is known in merger circles as a “Reverse Morris Trust,” which is used by big U.S. companies looking to shed unwanted divisions without paying hefty taxes.

P&G would separate the brands and merge them with a unit of Coty. P&G shareholders also would be able to exchange their shares for shares in Coty.

As a result, P&G shareholders would own 52% of all shares outstanding on a fully diluted basis, the companies said, while Coty’s existing shareholders would own 48% of the combined company.