Unilever buys Carver Korea for US$2.7 bn to strengthen Asia foothold

Unilever has agreed to fork out US$2.7 billion to buy South Korean cosmetics company Carver Korea from Goldman Sachs and Bain Capital Private Equity, in a bid to build a global beauty business.

Founded in 1999, Carver became the "fastest-growing" skincare business in South Korea through the sales of its brand AHC, which focuses on age management, and hydration and nourishment, according to the press statement. It is well-known for its product titled "AHC - The Pure Real Eye Cream for Face".

Marketing has reached out to Unilever and Carver Korea for comment.

According to Alan Jope, Unilever president personal care, North Asia is the largest skincare market worldwide and Carver Korea will "significantly" strengthen its position in the region. The brand will also complement Unilever's existing portfolio, enabling it to provide consumers with luxury skincare products at affordable prices.

“AHC has been strongly gaining popularity thanks to its efficacious, innovative and premium products; and it therefore offers great opportunities for growth," he added.

Unilever saw a 3.0% growth in underlying sales during the first half of 2017, and brand and marketing investment also contributed to the increase in gross margin, which jumped to 43.1%. This is reflective of a "recalibration" of advertising spend in the overall market, strong savings delivery from its zero-based budgeting programme, as well as innovation and support plans weighted towards the second half of 2017, particularly in personal care.

CEO Paul Polman said the company's first half results show continued growth well ahead of its markets and a "substantial step-up" in profitability.

"The transformation of Unilever into a more resilient, more competitive and more profitable business is accelerating. Our change programme Connected 4 Growth"(C4G) is making our business even more agile, less complex and increasingly responsive to fast-changing consumer trends. The resulting increase in innovation speed and effectiveness will allow us to grow ahead of market," Polman said. He added that the company is anticipating accelerated growth in the second half of the year, driven by the phasing of its innovation plans and a step-up in brand and marketing investment.

Earlier this year, the company revealed that it was able to reduce its media spend by 12% in the Southeast Asia market through its new zero-based budgeting (ZBB) strategy. This follows the company’s move to tighten its disciplines around media planning. CFO Graeme Pitkethly said that ZBB has given Unilever “much greater visibility” on exactly where marketing and brand investment is going.