L’Oreal and Natura & Co., (LRLCY) two leading cosmetic companies in France and Brazil recently released a statement that said that L’Oreal would buy Aesop. The Monday announcement said that the Australian luxury brand would be acquired at an enterprise value of $2.53 billion. The deal is expected to close in the third quarter of the year and will be a cash deal on its closing date.
The high-end cosmetic giant has been looking to expand into other markets including the Chinese as it is increasing its presence in markets where consumers remain less affected by economic downturn and market factors.
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Brazil’s Natura has been looking for financial relief as it faces huge debts and smaller profit margins. The sale of its luxury Australian brand Aesop is expected to minimize its financial issues to some extent. The deal is part of the changes in the company after Fabio Barbosa took over from former chief executive and executive chairman Roberto Marques.
Aesop was established by Natura and Co. in 1987. The cosmetic firm has its headquarters in Melbourne, Australia. It sells skin and hair care as well as body care products.
Aesop is an extremely profitable brand of Natura. It operates roughly 400 stores. In 2022, it reached $22 million in sales, which is about 21 percent higher than the sales in 2021.
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The Natura brand is also the owner of Avon and The Body Shop. It acquired The Body Shop from L’Oreal in 2017.
French cosmetic giant L’Oreal expects its sales to increase after the acquisition of Aesop. It has a history of acquiring emerging brands and making them better with the help of its distribution network across the globe.
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