L’Oreal (LRLCY) is expanding its beauty and skincare marketplace base with an acquisition of Aesop, a luxury Australian beauty brand owned by Brazil-based Natura, which also owns The Body Shop and Avon.
The $2.5 billion deal was announced on April 3, giving Paris, France-based L’Oreal an even larger global footprint with Aesop, which holds 400 points of sale across Europe, Australia, New Zealand, the U.S., and, more recently, in China. Aesop generated $537 million in sales in 2022. That’s up from just $28 million a decade ago.
The Aesop purchase surpasses the previous L’Oreal buyout record of $1.7 billion in its 2008 purchase of YSL Beauté.
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Aesop is an intriguing and emerging player in the worldwide skin, hair, and body products market.
The company’s ubiquitous amber packaging, plant-based ingredients, and sustainable vegan formulations have fueled Aesop’s rise as a global superbrand across luxury retail, beauty, and hospitality locations around the world.
“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, chief executive officer at L’Oreal Groupe. “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 also offered investors an implied endorsement of Aesop’s magic touch with consumers.
“We have great confidence that Aesop will join the L’Oréal Luxe Billionaire brands club and therefore contribute significantly to the growth of the division in the years to come,” said Cyril Chapuy, president of L’Oreal Luxe.
Both companies plan on capping the deal by the third quarter of 2023.
