French L’Oréal has entered exclusive negotiations with Brazilian Natura Cosméticos to sell store chain The Body Shop, in a deal that should be worth a billion euro.
Plenty of interest
L’Oréal acquired The Body Shop in 2006, but decided to sell it because of its weaker results over the past few years. The Body Shop's turnover in the past fiscal year dropped 2 %, contrary to the 2.3 % turnover increase for the rest of the group.
Plenty of parties have shown an interest, like private equity firms CVC, Carlyle and Advent and a Chinese holding, Fosun. It now seems like Brazilian Natura Cosméticos, specialized in natural care products just like The Body Shop, will prevail. The two companies have entered exclusive negotiations today.
According to sources, the Brazilian group made a one billion euro bid, exactly the amount L'Oréal wanted, but which experts deemed unrealistic. It now seems the French group will get its way and get back its original investment.
Second largest in Brazil
Natura Cosméticos' bid will now be presented to The Body Shop's staff and needs to get approval from both the Brazilian and American Bureau of Competition. If that all goes well, the acquisition will be finalized before the end of the year.
Natura Cosméticos may not ring a bell in Europe, but it is Brazil's second largest, trailing only O Boticario. The Body Shop on the other hand currently has more than 3,000 stores across 66 countries.