Kylie Jenner attends the Heavenly Bodies: Fashion & The Catholic Imagination Costume Institute Gala at The Metropolitan Museum of Art on May 7, 2018 in New York City. (Photo by Dia Dipasupil/WireImage)

Dia Dipasupil | WireImage | Getty Images

Beauty company Coty is taking a majority stake in Kylie Cosmetics, the company announced Monday morning.

Coty’s stock initially jumped as much as 6% on the announcement in premarket trading, but was recently trading up about 2%.

The deal gives Coty a 51% stake in the makeup company for $600 million. Kylie Jenner — the 22-year-old founder of the makeup company and member of the Kardashian-Jenner family and her team will continue to lead the company’s creative efforts related to products and communications.

“We are pleased to welcome Kylie into our organization and family,” said Coty CEO Pierre Laubies. “Combining Kylie’s creative vision and unparalleled consumer interest with Coty’s expertise and leadership in prestige beauty products is an exciting next step in our transformation and will leverage our core strengths around fragrances, cosmetics and skincare, allowing Kylie’s brands to reach their full potential.”

Coty and Kylie Cosmetics did not immediately respond to CNBC’s request for comment.

The deal is expected to close in the third quarter of fiscal 2020.

Coty is no stranger to beauty brand acquisitions. The company agreed to buy Proctor & Gamble‘s beauty brands in October 2016 for $12.5 billion. But it struggled to integrate the acquisition, which included Max Factor makeup, Clairol and Wella hair products and cosmetics brand CoverGirl. Coty’s stock fell 67% last year, but investors are expecting a turnaround under new management — the company welcomed Laubies as CEO and made changes to the board last year. Since arriving, Laubies has been looking to unload underperforming brands such as its hair care and professional beauty business. 

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But new deals apparently aren’t off the table. Coty is valuing Jenner’s fragrance and cosmetics company at $1.2 billion.

Jenner launched her brand in November 2015 with the Kylie Lip Kit, which included a liquid lipstick and lip pencil that both immediately sold out after their releases. Her list of products has grown ever since with makeup retailers like Ulta bringing Kylie Cosmetics items to its stores. All of the beauty categories will continue to be sold through beauty retailers and digital channels under the new partnership, Coty said.

“I’m excited to partner with Coty to continue to reach even more fans of Kylie Cosmetics and Kylie Skin around the world,” Jenner said, in a statement. “I look forward to continuing the creativity and ingenuity for each collection that consumers have come to expect and engaging with my fans across social media. This partnership will allow me and my team to stay focused on the creation and development of each product while building the brand into an international beauty powerhouse.”



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