Skadden, Arps, Slate, Meagher & Flom and Simpson Thacher & Bartlett are advising on a deal in which private equity firm KKR will take a 60% stake in the professional beauty and retail hair businesses owned by New York-based cosmetics company Coty Inc.

The sale includes German hair care company Wella and Clairol brands, for which KKR has agreed to pay $4.3 billion for its majority share.

Coty will receive a $3 billion cash infusion from its divestment.

At a time when the M&A market has all but frozen due to the economic impact of the COVID-19 pandemic, the parties were able to close the deal because they were able to think outside the box, said Skadden partner Jan Bauer.

Otherwise, "I don't think we would have gotten the deal done as quickly as we did," Bauer said in an interview.

As part of the deal, Coty will retain 40% of the shares and has issued $750 million of convertible preference shares to KKR.

Coty also plans to carve out the brands, which include OPI as well as Wella and Clairol, as a standalone company so that KKR can directly invest in them; Coty will receive an additional $250 million in convertible bonds upon completion of the transaction.

Coty will retain full ownership of its mass beauty business in Brazil.

Coty is majority-owned by JAB, the investment vehicle of the German billionaire Reimann family.

Skadden advised Coty. Bauer, who is head of Skadden's private equity practice in Germany, led a team that included partners Richard Youle, Katja Butler, Johannes Frey and Johannes Kremer.

Simpson Thacher advised KKR. The Simpson Thacher team included partners Clare Gaskell, Marni J. Lerner, Ravi Purushotham, David Vann, Peter Guryan, Katharine Moir, Yash Rupal, Lori Lesser and Adeeb Fadil.