L'Oreal's $1.14 billion acquisition of "Body Shop"

French cosmetics giant L'Oréal announced on Friday that it will acquire UK's famous natural cosmetics chain retailer Body Shop for 653.23 million pounds (about US$1.14 billion). L'Oreal said that the acquisition will help it manage its diversified development strategy.

L'Oreal will pay 300 pence per share, which is 12% higher than the closing price of the Body Shop last Thursday. Anita and Gordon Roddick, the founders of the Body Shop, are expected to accumulate 130 million pounds. Another initial investor, Mike Green, will also benefit from nearly £150 million.

The Body Shop was founded 30 years ago and is unique in the industry to provide natural, green, and cosmetological cosmetics. Its annual sales exceed 600 million pounds. After being acquired by L'Oréal, the Body Shop will continue to operate as an independent company. Anita will also serve as a community trade advisor for L'Oréal, in addition to retaining his current position as an advisor.

L'Oréal is currently in the middle of a management change, and its former head of US operations, Jean Paul Aigen, will replace Irving Middle as the new CEO, who still retains the chairmanship. Aigen is expected to formally take office next month. Therefore, the acquisition of the Body Shop is also regarded as the first major strategic move since L'Oreal entered the Aigen era.

Last month, Aigen pointed out to analysts that he was seeking to return L'Oreal to high sales growth, and that the acquisition of the Body Shop would be one of the ways. L'Oreal's current sales model is limited to store operations, while the body and small shops can bring the company a diversified chain retail transformation. In addition, the unique natural features of the Body Shop will greatly enrich L'Oreal's product line.