L’Oréal to pay $3.7bn for Melbourne-founded luxury cosmetics brand Aesop
French skincare company L’Oréal will pay US$2.5bn ($3.7bn) to buy Melbourne-founded Aesop, a luxury cosmetics, shampoo and bodycare brand that has worked its way into luxury hotels and bathrooms around the world.
The deal is designed to help Aesop’s Brazilian owner, Natura &Co, pay down debt, with the price tag showcasing the runaway value of a brand founded by Melbourne hairdresser, Dennis Paphitis, in 1987.
The sale represents the largest known price tag for a luxury brand founded in Australia.
L’Oréal chief executive, Nicolas Hieronimus, described Aesop as a “superb combination of urbanity, hedonism and undeniable luxury”.
“Aesop taps into all of today’s ascending currents and L’Oréal will [continue] to unleash its massive growth potential, notably in China and travel retail,” Hieronimus said.
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Aesop opened its first physical store in mainland China last year.
The sale comes after months of negotiations that included interest from rival French brand LVMH, the luxury goods empire headed by the world’s richest person, Bernard Arnault.
Aesop had been under majority control of Natura for more than a decade. The sale comes amid an overhaul of the Brazilian company’s operations after a troubled period of expansion and accumulating a heavy debt burden.
It plans to focus on other business units, including Avon and The Body Shop.
“With a strengthened financial structure and a deleveraged balance sheet, Natura &Co, exercising strict financial discipline, will be able to sharpen its focus on its strategic priorities, notably our investment plan in Latin America,” said Natura chief executive Fabio Barbosa.
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