Melbourne-based natural skincare group Aesop has been sold to L’Oreal for $3.7bn

The multi-billion dollar sale of the Melbourne-based natural skincare maker is believed to be the largest price tag for an Australian luxury brand.

Melbourne-based natural skincare group Aesop has been sold to global make-up and cosmetics giant L’Oreal for $US2.525bn ($A3.7bn) as consumers increasingly demand cosmetics and skincare products that have a natural and sustainable ethos.

Aesop, founded in Melbourne in 1987, has been owned by Brazilian company Natura & Co. It believed to be the multi-billion dollar sale is the largest price tag for an Australian luxury brand.

Under the ownership of its Brazilian parent, the Aesop business has become a more international brand, quickly outgrowing its Melbourne roots, to expand into 29 countries including a physical presence in China.

Under the transaction announced overnight, L’Oreal has signed an agreement to acquire Aesop for an enterprise value of $US2.525bn. The transaction is still subject to customary regulatory approvals and is expected to close in the third quarter of 2023.

With the transaction, Natura & Co will strengthen and deleverage its balance sheet, freeing up resources to focus on its strategic priorities, notably the integration in Latin America, as well as the further optimisation of Avon International’s footprint and the improvement of The Body Shop’s business.

Founded in Melbourne in 1987, Aesop is now owned by Brazilian company Natura & Co.

Since becoming part of Natura & Co in 2012, Aesop has posted spectacular growth. Between 2012 and 2022, gross sales increased from $US28m to $US537m.

The number of stores and counters increased from 52 to 395 as Aesop expanded its geographic footprint from eight markets to 29. More recently, in 2022, Aesop opened its first physical stores in Mainland China, and significantly grew its fragrance category.

Aesop uses plant-based materials for its range of products, with its use of natural products a key selling point to its customer base. The company was founded in 1987 by Dennis Paphitis.

Nicolas Hieronimus, chief executive of L’Oreal Groupe, said he was very excited to welcome Aesop and its teams to the L’Oreal Groupe 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. Aesop taps into all of today’s ascending currents and L’Oreal will contribute to unleash its massive growth potential, notably in China and Travel retail.”

Aesop boss Michael O’Keefe said it was an exciting day for Aesop.

“With the support of Natura & Co, over the past decade, we have built Aesop into an admirable global force in the luxury beauty space, with a powerful product proposition and a unique customer and retail experience.

“We now enter the next phase of our development and I’m confident that with L’Oreal’s partnership we will be able to bring our exceptional skincare products to even more people and continue to expand our brand globally. We thank Natura &Co for its support and are greatly looking forward to working with L’Oreal to continue our development, building on our distinctive brand and heritage.”

Originally published as Melbourne-based natural skincare group Aesop has been sold to L’Oreal for $3.7bn