L'Oreal buys luxury brand Aesop from Brazil's Natura for $2.5 billion
L’Oréal to acquire Aesop in $2.5 billion deal
French cosmetics group L'Oreal has signed an agreement with Brazil's Natura & Co to acquire Aesop, its Australian luxury brand known for its hand soaps as well as amber packaging, at an enterprise value of $2.53 billion, both firms confirmed on Monday.The acquisition is reportedly the third largest on record of an Australian company in the consumer products sector.
The deal is L'Oreal's largest-ever brand acquisition according to Dealogic data and it helps the firm expand its presence in the luxury cosmetics market. It will also provide the Brazilian luxury company with some financial relief amid shrinking margins and heavy debt.
Multiple companies wanted to acquire Aesop, which reported $537 million in sales in 2022, from its previous owner. It also reported double-digit growth across all its regions last year, and said it had entered the Chinese market "with a strong performance that exceeded expectations".
The brand is Natura's most profitable venture and it has almost 400 stores across cities.
"Aesop taps into all of today's ascending currents and L'Oreal will contribute to unleashing its massive growth potential, notably in China and travel retail," L'Oreal CEO Nicolas Hieronimus said in a statement.
For Natura, the deal adds to a broader organizational shakeup that saw former chief executive and executive chairman Roberto Marques step down in June last year, handing over the reins to Fabio Barbosa.
The firm said the sale would support its financial deleverage and focus on strategic priorities such as the integration of its Latin America operations, "as well as the further optimization of Avon International's footprint and the continued improvement of The Body Shop's business".
The acquisition, which is subject to regulatory approvals, will be paid in cash on its closing date, expected in the third quarter of 2023, Natura said. Melbourne-headquartered Aesop was established in 1987 and offers skin, hair and body care products.
(With inputs from agencies)