L'Oreal to Sell Body Shop to Natura Cosmeticos -- Update
June 09 2017 - 12:42PM
Dow Jones News
By Nick Kostov and Paul Kiernan
PARIS -- L'Oréal SA said Friday it has entered exclusive talks
to sell The Body Shop to Natura Cosméticos SA, after reviewing the
strategic options for what has been the French beauty-products
company's worst-performing business in recent years.
Natura, Brazil's biggest cosmetics company, has made a firm
offer that values The Body Shop at an enterprise value of EUR1
billion ($1.12 billion), L'Oréal said. The proposed deal is subject
to regulatory approval in Brazil and in the U.S.
"It's a dream deal," Natura Chief Executive João Paulo Ferreira
said in a conference call. "The proposed purchase of The Body Shop
will be the decisive step in turning us into an international
player in the cosmetics industry."
Founded in 1976 by British social and environmental campaigner
Anita Roddick and her husband, Gordon, The Body Shop expanded to
more than 60 countries and was acquired by L'Oréal in 2006. But it
has struggled in recent years amid tough competition and muted
growth in its home market of the U.K.
In 2016, The Body Shop posted a 4.8% decline in sales to
EUR920.8 million. Operating profit fell 38% year-over-year to
EUR33.8 million, or just 0.7% of L'Oreal's total.
L'Oréal began shopping for buyers for the brand earlier this
year, and Natura jumped at the opportunity. "The fact already knew
each other well probably facilitated the process," Mr. Ferreira
said, noting that Natura and The Body Shop first had talks in
2001.
Natura plans to finance the deal with loans from a group of
Brazilian and foreign banks, executives said, declining to identify
which banks are involved in the transaction. It plans to make a
one-time payment upon completion of the deal, which is expected to
close in 2017.
"The ethical values and expertise of Natura make it the perfect
new owner for The Body Shop to accelerate the rejuvenation of the
brand and its future expansion," said Jeremy Schwartz, chairman and
chief executive of The Body Shop.
Write to Nick Kostov at Nick.Kostov@wsj.com and Paul Kiernan at
paul.kiernan@wsj.com
(END) Dow Jones Newswires
June 09, 2017 12:27 ET (16:27 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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