Looks like luxury skincare is in with deep-pocketed investors.
Fashion heavyweight LMVH and beauty-industry leader L’Oreal are now the two top names looking to potentially acquire a stake in Australian cosmetics company Aesop, Bloomberg reports. The brand, which may be valued at US$2 billion (HK$15.69 billion) or more, is renowned for its luxe skin, body and hair care, as well as home fragrances. Shiseido, a Japanese beauty group, is also weighing placing a bid for the company, according to sources familiar with the matter.
In 2012, Brazilian cosmetics maker Natura & Co. agreed to buy a 65 percent stake in Emeis Holdings, which operates under the Aseop brand name in Australia, Asia, Europe and North America, for a whopping US$71.6 million (HK$561.63 million). Natura’s deal to acquire the company was officially completed in 2016. Fast forward to 2022, when Natura began working with Bank of America Corp. and Morgan Stanley to sell a stake in the skincare brand, which seemingly turned heads.
As of Monday, Bloomberg reports that shares in Natura were trading 13 percent higher at 10:23 am in São Paulo, giving the company a high-market value of US$3.9 billion/HK$30.59 billion (20.1 billion reais). Remaining anyonomous, people familiar with the matter claim deliberations are currently ongoing, with no guarantees that they will result in any offers for a stake in Aesop.
Tough markets for new listings in 2022 are part of the reason why Natura leaned toward a stake sale at the time. Bloomberg also reports that the move is being orchestrated by Fabio Barbosa, who took over as Natura CEO last year. According to a company filing in October, the brand aimed to unlock value at Aesop by possibly launching an IPO or a spinoff of the business, among other ideas. According to e-commerce platform Oberlo, the global beauty industry market size is set to be worth a staggering US$571.1 billion/HK$4,480 billion in 2023.
With that said, selling a stake to LVMH or L’Oreal—both of which manage massive beauty brands from Dior to Maybelline—may do much more than just unlocking Aesop’s potential.