Skincare company Aesop purchased by L’Oreal for $3.7 billion

A major beauty brand has bought out a renowned sustainable wellness label in a sale that’s smashed record deals in Australia.

Aesop CEO Michael O'Keefe. Picture: Matt King/Getty Images

A global cosmetics giant has acquired a renowned Melbourne-based skincare label in what is the biggest buyout for an Australian luxury brand in history.

French beauty and wellness company L’Oreal purchased personal care brand Aesop from its parent company Natura & Co for close to $US2.53 billion ($AUD3.7 billion) including debt.

The holding company, which also owns subsidiaries Avon, Natura and The Body Shop, said the sale will allow it to extend its other brands internationally and focus on making improvements.

“The divestment of Aesop marks a new development cycle for Natura & Co,” Fabio Barbosa, Chief Executive Officer of Natura & Co, said in a statement.

“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.”

Aesop is known for its cruelty-free formulas. Picture: Instagram / @aesopskincare

Aesop has brought spectacular growth to Natura & Co since its inception into the company in 2012, with gross sales increasing from $US28 million ($AUD41 million) to $US537 million ($AUD791 million) over 10 years.

Its number of stores globally also increased from 52 to 395, with it more recently opening up its first physical store in Mainland China last year.

The brand is celebrated for its plant-based and cruelty-free formulations.

Nicolas Hieronimus, CEO of L’Oreal Group, said the company is “very excited” to welcome Aesop and its teams to its family.

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

Global beauty brands taking over smaller labels is nothing unusual in the cosmetics industry with this latest takeover joining a spate of similar investments made in the last year.

L’Oreal’s latest purchase adds to a deal it signed in September to buy US skincare brand Skinbetter Science.

Aesop CEO Michael O'Keefe speaks during the Business of Fashion Presents VOICES at Sydney Opera House in Sydney. Picture: Matt King/Getty Images

L'Oreal purchased Aesop for a record price seen in the Australia luxury label industry. Picture: Instagram / @lorealparis

Meanwhile in November, beauty and fragrance brand Estee Lauder acquired luxury fashion and glassware company Tom Ford for $US2.3 billion which was a “delightful result” for the company.

“As an owned brand, this strategic acquisition will unlock new opportunities and fortify our growth plans for TOM FORD BEAUTY,” said Fabrizio Freda, CEO of The Estée Lauder Companies.

“It will also further help to propel our momentum in the promising category of luxury beauty for the long-term, while reaffirming our commitment to being the leading pure player in global prestige beauty.”

Then in December, English cosmetic company Silverwood Brands purchased an almost 20 per cent stake in Uk-based retailer Lush Cosmetics.

L’Oreal’s Aesop buyout is still subject to customary regulatory approvals however it’s expected the transaction will be completed by this year’s third quarter.

Originally published as Skincare company Aesop purchased by L’Oreal for $3.7 billion