L'Oréal acquires Aesop for a whopping US$2.5 billion

Beauty company L'Oréal will acquire Aesop, a luxury skincare brand, for US$2.5 billion, according to a Natura & Co in a statement. 

It stated that it had reached an agreement under which L'Oréal will acquire Aesop to "[open] a new chapter of the luxury brand's growth" after 10 years under Natura & Co.

The transaction however is still subject to customary regulatory approvals and is expected to close in Q3 2023, according to Natura & Co. In the transaction, Morgan Stanley served as lead financial advisor while Bank of America  served as financial advisor, and Davis Polk & Wardwell as main legal advisor to Natura &Co.

Don't miss: L’Oréal names new chief digital and marketing officer for SAPMENA

Natura & Co added that with the transaction, it will be able to strengthen and deleverage its balance sheet, freeing up resources to focus on its strategic priorities, notably the integration in Latin America, as well as the further optimisation of Avon International's footprint and the improvement of The Body Shop´s business.

"This is an exciting day for Aesop. We now enter the next phase of our development and I'm confident that with L'Oréal's partnership we will be able to bring our exceptional skincare products to even more people and continue to expand our brand globally," said Michael O'Keefe, the CEO of Aesop.

Under the umbrella of Natura &Co, which Aesop joined in 2012, the brand has also seen gross sales increase from US$28 million to US$537 million. The number of stores and counters also increased from 52 to 395 globally as Aesop expanded its geographic footprint from 8 markets to 29.

In 2022, Aesop also opened its first physical stores in Mainland China and significantly expanded its fragrance range. 

"The divestment of Aesop marks a new development cycle for Natura &Co. 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 Fabio Barbosa, Chief Executive Officer of Natura & Co. He added that the brand will continue concentrating on improving  The Body Shop's business and refocusing Avon International's footprint. 

"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," he said. 

The news comes shortly after L’Oréal named Lex Bradshaw-Zanger as the chief digital and marketing officer (CDMO) of L’Oréal SAPMENA from 1 May 2023. He will be responsible for boosting L’Oréal’s digital and marketing innovation in the SAPMENA Zone, which comprises over 35 markets and covers the fastest growing, most populous, and young demographic markets of the world.

Bradshaw-Zanger succeeds Shelly Chiang, who takes on a new role as chief digital and marketing officer and head of corporate affairs and engagement for L’Oréal Taiwan from 1 April 2023.

Related articles:
Philips' consumer marketing director departs to join L'Oréal in SG
L’Oréal Groupe launches new luxury beauty brand through joint venture
L'Oréal denies Financial Times report of it suspending Twitter advertising