Aesop is acquired by L'Oreal for $2.5 billion from Brazil's Natura

The French cosmetics group L'Oreal has struck a deal with the Brazilian natural cosmetics company Natura & Co to buy Aesop, its Australian luxury brand, at the enterprise value of $2.53 billion, the companies announced on Monday.

‍

The deal expands L'Oreal's presence in the luxury cosmetics market, while also bringing a measure of relief for the Brazilian company, which has been struggling with shrinking margins and heavy debt for the past few years.

‍

With nearly 400 stores, Natura's most profitable brand had sales of $537 million in 2022, an increase of 21% in constant currency when compared to a year earlier.

‍

Last year, the company also reported double-digit growth across all its regions, and it said the company had entered the Chinese market with a strong performance that far exceeded expectations.

‍

“L’Oreal will contribute to unlocking the massive growth potential of Aesop, notably in China and travel retail, through its strategic partnership with Aesop, which taps into all of today's rising currents,” L’Oreal CEO Nicolas Hieronimus said in a statement.

‍

Taking place in the context of Natura's broader organizational shake-up, the deal complements the resignation of former chief executive and executive chairman Roberto Marques, whose post was taken over by Fabio Barbosa in June last year.

‍

Avon International announced that the sale will support its financial deleverage and enable the company to focus on strategic priorities like the integration of its Latin America operations, as well as further optimizing Avon International's footprint and improving the performance of The Body Shop in the future.

‍

Natura said in a statement that the acquisition, which is subject to regulatory approval, will be paid for in cash at the closing date, which is expected to be in the third quarter of 2023.