Procter and Gamble Co. (P&G)’s decision to sell its beauty and professional salon business, which includes brands such as Wella and Max Factor, in a $12.5 billion deal to Coty Inc. could probably lead to the entry of the latter into India’s high-growth salon market.

The brands of P&G’s India unit that come under the merger are Wella Hair Cosmetics Pvt. Ltd, Wella Professional, System Professional, Sebastian Professional and Nioxin.

P&G’s fragrance business in India is operated through distributor Baccarose Perfumes and Beauty Products Pvt. Ltd, which has a dominant share of the premium fragrance market with brands such as Hugo Boss, Gucci and Lacoste.

Coty, which has fragrance brands such as Davidoff and Calvin Klein, Playboy and Adidas, is currently present in India through five distributors and has a strong presence in the mass market.

“In India the merger will see the Wella Hair Cosmetics unit go to Coty," said a P&G India spokesperson who did not want to comment on the fragrances and Max Factor business as it is handled by distributors.

“With this merger, Coty will get a foothold in the salon business, which is a huge growth channel and has seen the entry of companies like Hindustan Unilever Ltd and Godrej Consumer Products Ltd in the last two years," said Nitin Mathur, research analyst (emerging markets consumer), Société Générale Group.

“The professional hair care salon market is a 700-800 crore market growing at 18-20%," said Karthik Kaushik, country head, beauty care (professional), Henkel Adhesive Technologies, a subsidiary of Henkel AG and Co. KGaA, which is looking to double the number of salons in which Schwarzkopf is retailing India this year from 8,000 to 16,000.

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