Coty Inc., a maker of fragrances, nail polish and skin lotions, surged as much as 19 percent on a report that it reached a $12 billion agreement with Procter & Gamble Co. to acquire beauty products that had been put up for sale.

The deal involves Coty taking control of P&G’s Wella hair-care unit and two beauty lines, the New York Post reported. Under the terms of the agreement, Coty would buy a little less than a majority stake while running the combined operations, allowing P&G to avoid paying capital gains tax on the deal, the newspaper said.

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