Natura &Co, the Brazilian firm that owns The Body Shop and Avon brands, has agreed to sell its Aesop luxury beauty care brand to L’Oréal in a $2.5bn deal.
Australia-based Aesop has been owned by Natura for the last ten years, during which time its sales have increased from $28m to $537m. The brand has also expanded its geographic footprint from eight markets to 29 and recently opened its first physical stores in mainland China. Its 400 stores globally sell skin and hair care products, as well as fragrances.
Natura stated that the sale would free up resources for its strategic priorities, which include further expansion and improving the performance of its Body Shop chain that it bought from L’Oréal in 2017.
The divestment marks a significant step in its restructuring programme aimed at reviving its share price and financial performance in the wake of an international acquisition spree during the previous decade. Natura said the deal would also support its efforts to reduce debt.
Fabio Barbosa, Chief Executive of Natura &Co, commented: “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.
“We will also be able to concentrate on continuing to improve The Body Shop’s business and refocusing Avon International’s footprint.”
For L’Oréal, the deal is its largest acquisition in decades and the first significant transaction for its Chief Executive, Nicolas Hieronimus, who took over the role in 2021. He said: “I am very excited to welcome Aesop and its teams to the L’Oréal Groupe family. 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.”
The deal, which is subject to regulatory approvals, is expected to close in the third quarter of this year.
