L’Occitane inks US$900mil Elemis deal in luxury skincare boom


HONG KONG: Luxury cosmetics firm L’Occitane International SA agreed to buy beauty and skincare brand Elemis for about US$900mil, its biggest deal on record as the maker of organic lotions looks to expand in the United States and United Kingdom.

The Hong Kong-listed L’Occitane agreed to buy the privately-held Elemis from Steiner Leisure Ltd, according to a statement from the companies Sunday. Steiner is a portfolio company of private equity firm L Catterton which focuses on consumer sector investments.

L’Occitane said the acquisition will help bolster the group’s growth globally, with plans to bring the Elemis marque that’s popular among millennial and Gen X consumers, into new markets. The deal is the latest in a spate of acquisitions of high-end skincare brands in recent years, with demand for premium, natural beauty products on the rise in Asia.

Shares of L’Occitane fell as much as 3.2% Monday in Hong Kong, narrowing its single-digit growth this year. It has headquarters in Luxembourg and Switzerland.

With the Elemis deal, L’Occitane is likely to reach its �1.7bil (US$1.95bil) sales target in two years, according to a Bloomberg Intelligence note Monday. L’Occitane could launch exclusive items for China, Hong Kong and the United States, the three markets which is driving most of its revenue growth to offset the slowdown in Europe, the note said.

“It is a major step forward for L’Occitane in building a leading portfolio of premium beauty brands,” chief executive officer Reinold Geiger said in a statement. “Elemis is well positioned for continued global growth.”

The deal is L’Occitane’s largest acquisition and follows Natura Cosmeticos’ purchase of The Body Shop from L’Oreal SA for about �1bil in 2017.

Unilever also acquired South Korea’s biggest maker of beauty products, Carver Korea Co, for �2.27bil in 2017.

Growth in the global beauty market likely grew 5% last year, driven by Asia demand, according to Bloomberg Intelligence. In Greater China, L’Occitane’s biggest sales market, Chinese consumer have shown a willingness to pay for premium and organic skincare and cosmetics products. — Bloomberg

Skincare