Coty climbs after agreeing to pay $600 million for a majority stake in Kylie Jenner's makeup line
- Coty announced Monday that it agreed to pay $600 million for a majority stake in Kylie Cosmetics, the makeup line owned by Kylie Jenner.
- Shares of Coty gained as much as 4.9% on the news.
- The deal will help Coty, responsible for beauty brands such as CoverGirl, appeal to younger consumers.
- Watch Coty trade live on Markets Insider.
Shares of Coty gained as much as 4.9% Monday following reports that it agreed to pay $600 million for a majority stake in Kylie Jenner's makeup line, Kylie Cosmetics.
The deal, which values Jenner's company around $1.2 billion, will help Coty - responsible for brands such as CoverGirl, Rimmel London, and Sally Hansen nail polish - appeal to younger consumers.
It's "an exciting next step in our transformation and will leverage core strengths around fragrances, cosmetics and skincare, allowing Kylie's brands to reach their full potential," the company said in a release.
Jenner, now 22, started her cosmetics company with a line of popular lip kits in 2015, when she was still a teenager, according to Bloomberg. Her products are now available online and in more than 1,100 Ulta stores across the US.
Partnering with Coty will allow her and her team to stay focused on product development while "building the brand into an international beauty powerhouse," she said in a release.
Joining forces with Jenner comes at a pivotal time for Coty. The company has struggled to perform since it bought a group of beauty brands from Procter & Gamble in 2016, according to The Wall Street Journal.
Kylie Cosmetics and Kylie Skin, on the other hand, are "two of the fastest-growing and most-engaged beauty brands on social media," the company said. Kylie Cosmetics realized an estimated $177 million in net revenues in the past 12 months.
Coty has gained more than 87% year-to-date.
