Coty and Duracell: Selling WellNarrow moat

Procter & Gamble (PG) — moat facet

P&G sold Duracell and 41 beauty brands for its own shares, shrinking its share count while dropping businesses it did not lead.

P&G's two largest disposals were structured to reduce its share count. Duracell went to Berkshire Hathaway in February 2016 in exchange for Berkshire's P&G shares1. The 41 beauty brands went to Coty on 1 October 2016 for $11.4 billion of value, of which about $9.4 billion was 105 million P&G shares tendered by P&G shareholders and $1.9 billion was debt Coty assumed2. P&G recorded an after-tax gain of $5.3 billion3.

Coty transaction value ($bn)about 9.4P&G shares tendered1.9Debt assumed by Coty5.3After-tax gain to P&GP&G Form 10-K FY2017; total value $11.4bn
Paid mostly in P&G stock.

Those gains explain one of the odd years on P&G's earnings chart. Net earnings attributable to P&G were $15,326 million in fiscal 2017, inflated by the Coty gain, against $9,750 million in fiscal 20184.

Selling through share exchanges is the tax-efficient way to shrink. P&G received its own stock rather than cash, reducing the number of shares without a taxable sale. Diluted weighted shares were 2,422.5 million in fiscal 2026, down from 2,454.4 million in fiscal 20255, and the share count keeps falling through buybacks.

The disposals also removed businesses P&G was not good at. The Coty brands were mostly fragrances and cosmetics, where fashion matters more than performance; batteries were a commodity. What remained in Beauty is hair care, personal care and skin care6.

The Duracell exchange came alongside heavy buybacks. In fiscal 2016 P&G reported $8.2 billion of share repurchases and the Duracell exchange combined7, in the year it also agreed the Coty sale. The two deals together turned brands P&G did not want into a smaller share count.

In short, these were good sales that sharpened the moat. The test now is whether what remains grows; if P&G has to buy back into categories it left, the pruning will have been a round trip. Diluted shares, 2,422.5 million in fiscal 20268, show the lasting effect.

Moat trajectory: Holding steady

Diluted shares 2,422.5M in FY2026, down from 2,454.4M.

The number that tests this moat
Reported
Diluted weighted shares, FY2026
2,422.5M (2,454.4M in FY2025)

The lasting effect of share-for-brand disposals and buybacks; a rising count would reverse it.

Source: P&G Q4 FY2026 results release ↗
⚠ Threats to the moat
⚠ THREAT 01
What Was Left of Beauty Earns Less
Beauty's share of P&G's net earnings fell from 22% to 17% in four years, and its margin from 21.2% to 16.7%.
References
  1. ReportedDuracell went to Berkshire Hathaway in February 2016 in exchange for Berkshire's P&G shares.
    Procter & Gamble Form 10-K for fiscal 2016 - the portfolio reduction to about 65 brands, the Duracell exchange with Berkshire Hathaway, segment shares and blade share. — FY2016 · publ. August 2016 · source ↗
  2. ReportedThe 41 beauty brands went to Coty on 1 October 2016 for $11.4 billion of value, of which about $9.4 billion was 105 million P&G shares tendered by P&G shareholders and $1.9 billion was debt Coty assumed.
    Procter & Gamble Form 10-K for fiscal 2017 - completion of the Beauty Brands transaction with Coty ($11.4 billion of value, $5.3 billion after-tax gain). — FY2017 · publ. August 2017 · source ↗
  3. ReportedP&G recorded an after-tax gain of $5.3 billion.
    Procter & Gamble Form 10-K for fiscal 2017 - completion of the Beauty Brands transaction with Coty ($11.4 billion of value, $5.3 billion after-tax gain). — FY2017 · publ. August 2017 · source ↗
  4. ReportedNet earnings attributable to P&G were $15,326 million in fiscal 2017, inflated by the Coty gain, against $9,750 million in fiscal 2018.
    Procter & Gamble Form 10-K for fiscal 2019 - the $8.3 billion Shave Care impairment, the Merck KGaA over-the-counter acquisition, five-year financial summary, segment shares, Walmart and top-ten customers. — FY2019 · publ. August 2019 · source ↗
  5. ReportedDiluted weighted shares were 2,422.5 million in fiscal 2026, down from 2,454.4 million in fiscal 2025, and the share count keeps falling through buybacks.
    Procter & Gamble fourth-quarter and fiscal 2026 results release, Form 8-K exhibit 99.1, with fiscal 2027 guidance - quarterly and fiscal-year headline results and cash flow. — Q4 FY2026 · publ. 29 July 2026 · source ↗
  6. ReportedWhat remained in Beauty is hair care, personal care and skin care.
    Procter & Gamble Form 10-K for fiscal 2026 (year ended 30 June 2026) - Note 2 segment information: net sales, earnings before tax, net earnings, margins, capital spending and depreciation by segment. — FY2026 · publ. 4 August 2026 · source ↗
  7. ReportedIn fiscal 2016 P&G reported $8.2 billion of share repurchases and the Duracell exchange combined, in the year it also agreed the Coty sale.
    Procter & Gamble Form 10-K for fiscal 2016 - the portfolio reduction to about 65 brands, the Duracell exchange with Berkshire Hathaway, segment shares and blade share. — FY2016 · publ. August 2016 · source ↗
  8. ReportedDiluted shares, 2,422.5 million in fiscal 2026, show the lasting effect.
    Procter & Gamble fourth-quarter and fiscal 2026 results release, Form 8-K exhibit 99.1, with fiscal 2027 guidance - quarterly and fiscal-year headline results and cash flow. — Q4 FY2026 · publ. 29 July 2026 · source ↗
Sources
Generated September 26, 2026