L’Oréal buys luxury beauty brand Aēsop for $3.72 billion

Iconic Australian beauty brand Aēsop has been snapped up by French industry giant L’Oréal for $3.72 billion (AUD).

L’Oréal announced on Tuesday the acquisition of the luxury brand, known for its skincare and haircare products, after reaching an agreement with former company Natura & Co.

Nicolas Hieronimus, Chief Executive Officer, L’Oréal Groupe revealed that the group has plans to expand the luxury brand’s reach across China.

As the team at Natura & Co announced the deal, it means they’ve freed up enough cash to expand their other Avon and The Body Shop brands across Latin America.

Launched in 1987 by Melbourne hairdresser Dennis Paphitis, Aēsop became well known in the luxury space and respected as one of the best vegan products on the market.

Last year, the brand reported sales of $791 million worldwide, showing it has 400 outlets in the Americas, Europe, Australia, New Zealand and Asia.

Mr. Hieronimus said LOréal will help unleash Aēsop’s huge growth potential, “particularly in China and the travel industry.”

‘Aēsop is the epitome of avant-garde beauty, whose products are not only made with great care and exceptional attention to detail; they are an excellent combination of urbanity, hedonism and undeniable luxury,” he said.

Cyril Chapuy, president of L’Oréal Luxe, also commented on the acquisition, admitting he was excited to include the Aussie-grown company under its umbrella of brands.

“Aēsop occupies a very unique position in the global luxury beauty market due to its design-led brand essence, its highly effective and sensorial products and its customer-obsessed retail philosophy,” he said.

Members of the Aēsop team will also move to the LOréal group, which employs more than 87,000 people worldwide.

“We look forward to welcoming Aēsop CEO Michael O’Keeffe and his experienced and passionate teams to work together to further grow the brand’s remarkable potential by continuing to cultivate its uniqueness and values,” said Chapuy.

Fábio Barbosa, Chief Executive Officer of Natura & Co, a Brazilian company, said the sale of Aēsop marks a new development cycle for the company.

The brand was previously owned by Brazilian brand Natura & Co, who bought it for $68 million in 2012

“We will be able to sharpen our focus on strategic priorities, especially our investment plan in Latin America.

“We will also be able to focus on further improving The Body Shop’s business and refocusing Avon International’s footprint.”

Natura & Co bought Aēsop in 2012 for $68 million.

Rumors that Natura was “looking to sell” began circulating in late 2022, before Bank of America and Morgan Stanley were assigned to find buyers.

LVMH, the luxury goods empire that controlled the world’s richest person, Bernard Arnault and Japanese makeup and perfume brand Shiseido Co are also said to be interested in the company.

LOréal’s leadership team also revealed that they look forward to adding more brands to their “billionaires’ club” in the future.

The sale of Aēsop flags increased interest in Australian grown produce.

Last year, Australian food brands Four’N’Twenty, Nanna’s bakeware and Lean Cuisine were sold to Hong Kong-based PAG.

Carlton and United Breweries, the brand behind Victoria Bitter, Carlton Draft, Cascade and Crown Lager, was bought by a Japanese company in 2020 for $16 billion.

Schweppes Australia and even Cottees cordial are also owned by the Asahi Beverages Group.

In 2019, Arnott’s – the company behind many iconic cookies – was sold to American group Kohlberg Kravis Roberts.

Selling iconic Australian brands is not new.

in the 1990s, Speedos was taken over by the UK-based Pentland group.

David Jones, Country Road, Billabong, Quicksilver and Roxy are also foreign owned.