Dive Brief:
- After months of rumored suitors, L’Oréal Group announced it has entered into an agreement with Natura & Co to acquire luxury beauty brand Aesop for $2.5 billion, the company announced Tuesday. The deal is subject to regulatory approvals and is expected to close in Q3 this year, according to another press release from Natura & Co.
- Australian brand Aesop operates about 400 points of sale across the Americas, Europe, Australia, New Zealand and Asia, according to the release. Natura & Co said the deal will strengthen and deleverage its balance sheet, and allow it to focus on strategic priorities such as improving The Body Shop.
- Aesop was created in 1987 and sells skin, hair, body care products and more — including a $41 hand soap and $110 candle. The brand reported gross sales of $537 million in 2022.
Dive Insight:
For L’Oréal, Aesop’s potential made it an ideal fit for the company.
“I am very excited to welcome Aesop and its teams to the L’Oréal Groupe family,” Nicolas Hieronimus, chief executive officer at L’Oréal Groupe, said in a statement. “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. Aesop taps into all of today’s ascending currents and L’Oréal will contribute to unleash its massive growth potential, notably in China and Travel retail.”
Aesop’s parent company, Natura & Co, had been courting potential buyers for months, with LVMH and Shiseido named among those interested, according to January reporting from Bloomberg. Natura & Co. had also considered an IPO or spinoff of the Aesop brand, according to reporting from Reuters in October.
Natura acquired a 65% majority stake in Aesop in 2012 for about 68 million Australian dollars. In addition to Aesop and The Body Shop, Natura operates its own namesake brand and Avon.
Both L’Oréal and Natura & Co. mentioned Aesop’s growth potential in China, with it opening its first physical store in the region in 2022.
Correction: A previous version of this story misstated how much Natura paid to acquire a majority stake in Aesop in 2012. Natura paid 68 million Australian dollars.
