PARIS – L’Oréal has signed an agreement to acquire Aesop, the Australian luxury personal care company, from Natura & Co.
The proposed transaction values Aesop at an enterprise value of more than $2.5 billion.
Aesop, which is based in Melbourne, Australia, was created in 1987. It makes skin, hair and body care products with plant-based ingredients and sustainable vegan formulas.
The brand — with a strong retail signature, as well as iconic amber bottles with black-and-white striped labels — is available in prestige retail, beauty and hospitality venues globally.
Aesop operates approximately 400 sales points in the Americas, Europe, Australia, New Zealand and Asia. Its first store opened in China in 2022.
Natura & Co. said in a material fact statement that the purchase price is to be paid in cash on closing, which is expected to take place in the third quarter of 2023.
“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, L’Oréal chief executive officer, in a statement.
“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,” he said.
Aesop will join the L’Oréal Luxe division, which also includes beauty brands such as Lancôme, Yves Saint Laurent, Helena Rubinstein, Kiehl’s and Mugler.
“Aesop holds a very unique positioning on the global luxury beauty market thanks to its design-led brand essence, its highly efficacious and sensorial products, as well as its customer-obsessed retail philosophy,” said Cyril Chapuy, president of L’Oréal Luxe.
“We look forward to welcoming Aesop’s CEO Michael O’Keeffe and his experienced and passionate teams to continue to grow together the brand’s remarkable potential, by carrying on cultivating its uniqueness and its values,” he continued. “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.”
Fábio Barbosa, CEO of Natura & Co., added: “The divestment of Aesop marks a new development cycle for Natura & Co. With a strengthened financial structure and a deleveraged balance sheet, Natura & Co., exercising strict financial discipline, will be able to sharpen its focus on its strategic priorities, notably our investment plan in Latin America.”
He said Natura & Co. will also be able to hone in on continuing to improve the business of The Body Shop and refocus Avon International’s footprint.
“We are proud of the remarkable success of the Aesop brand, and we are extremely grateful to all Aesop’s associates, who contributed immensely not only to Aesop’s success, but also to making Natura & Co. what it is today,” said Barbosa.
“We are confident that Aesop’s growth story will continue under the ownership of L’Oréal and wish Aesop continued success in this new chapter,” he said.
Which group might acquire Aesop had built up a lather of excitement in the beauty industry over the past few months, with names of major strategics and private equity groups swirling around as possible prime contenders.
São Paulo-based Natura on Oct. 18 said it had initiated the study of a possible initial public offering of Aesop, the group’s luxury beauty and wellness brand and business unit, in the U.S. or a spin-off of Aesop. That then could have been followed by an IPO.
But that never materialized, nor did the possibility of signing on a minority investor.
Most recently, on March 17, Natura said in an update on strategic alternatives for Aesop that its management “continues to evaluate strategic alternatives structures involving the investment in its subsidiary, Aesop.”
Natura’s board of directors confirmed it had received initial nonbinding offers for a partial or total sale of Aesop, and that it continued evaluating strategic initiatives. Natura didn’t disclose further updates.
Aesop has long been the jewel of Natura’s crown.
In December 2012, Natura and Aesop announced that they had entered into a definitive agreement, in which Natura would acquire a 65 percent stake in Aesop for about 68 million Australian dollars, or $46 million, in cash. That included the anticipated acquisition of Aesop’s distributors.
At the time of its sale to Natura, Aesop was expected to generate about 64 million Australian dollars in pro-forma sales during the fiscal year ended June 2013.
Since then Aesop’s business has grown exponentially, and last year, the brand registered sales of $537 million.