L'Oréal has acquired Aesop for US$2.52bn, ending the Australian luxury cosmetics brand’s decade-long ownership under Natura & Co.
The French cosmetics goliath will complete the deal in Q3 2023, and plans to expand the brand’s presence in China and invest into its travel retail operations.
It comes after Natura & Co first began considering selling a minority stake in the brand in December 2022.
An IPO was considered at the time, but volatile markets forced Natura to focus on a stake sale instead.
This prompted an intense bidding war between rival beauty giants LVMH, led by the world's richest man Bernard Arnault, and Shiseido.
“Aesop is the epitome of avant-garde beauty, whose products are not only made with great care and exceptional attention to detail; they are a superb combination of urbanity, hedonism and undeniable luxury,” said Nicolas Hieronimus, CEO of L'Oréal.
The Brazilian beauty manufacturer said the sale was made to strengthen its balance sheet, allowing for further investments to be made into the Latin American market.
It also plans to increase Avon International's footprint and improve The Body Shop´s business model, which has seen straggling sales in recent years.
Natura originally acquired a majority stake of Aesop in 2012 and took complete ownership in 2016.
Aesop has over 400 global stores Aesop has over 400 global stores
“With a strengthened financial structure and a deleveraged balance sheet, Natura & Co, exercising strict financial discipline, will be able to sharpen its focus on its strategic priorities, notably our investment plan in Latin America,” said Barbosa.
“We are confident that Aesop's growth story will continue under the ownership of L'Oréal and wish Aesop continued success in this new chapter."
Natura & Co's sales have seen a mixed performance over the past year.
The brand owner saw revenues drop by 10.7% to Brazilian Real $10.39bn in Q4 2022, and gross profit also slumped by 11.6% to R$6.6bn during the period.
Aesop’s performance, however, consistently helped to offset lagging sales.
In particular, its entry into the Chinese market resulted in double digit growth of 18.2% for the luxury cosmetics brand in its fourth quarter results.
“While we expect 2023 to be another challenging year, our priorities of focusing on cash generation and improving the company's capital structure will allow us to invest in our priorities, building the path to unlock significant value,” said Barbosa at the time.
