Brazil's Natura on verge of Body Shop buy
L’Oréal has entered into exclusive discussions regarding The Body Shop with Brazil-based natural beauty giant Natura Cosméticos SA. And it looks like a deal is virtually done with L’Oréal appearing to be quite bullish on it happening.
The French group’s chairman and CEO Jean-Paul Agon said: "I am very pleased to announce Natura as the potential new ‘home’ for The Body Shop. It is the best new owner we could imagine to nurture the brand DNA around naturality and ethics.”
“Natura will support The Body Shop development in the long-term and enable The Body Shop to best serve its customers while respecting its strong commitments towards its employees, franchisees and stakeholders,” he added.
The move came as something of a surprise given the private equity firms and Chinese conglomerates that had been linked with auction process. But it seems that the UK ethical beauty retail could end up being sold to another cosmetics specialist, and one completely in tune with its natural ingredients/anti-animal testing stance.
And another surprise is that it looks like L’Oréal might achieve the kind of price it had been looking for. The French company said Friday that the proposed transaction puts an enterprise value on The Body shop of €1bn. There had been concerns that sharply sliding sales at the firm and the more intensive competition in the ethical/natural products arena would dent the eventual purchase price.
L'Oréal acquired the company in 2006, 30 years after it was founded by Anita Roddick. The company said it generated retail sales of around €1.5bn and net sales of €921m last year through over 3,000 points of sale and via e-commerce.
The proposed deal with Natura will be submitted to L'Oréal's employee representative body and is subject to regulatory approval notably in Brazil and in the US but is expected to close during 2017.
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