L'Oréal SA said June 9 that it had entered exclusive talks to sell The Body Shop to Brazil's Natura Cosméticos SA in a deal that would end the French cosmetics giant's 11-year ownership of the beauty products retailer.
The French company, owner of brands including Maybelline, Kiehl's, Shu Uemura and Garnier, said the proposed deal had an enterprise value of €1 billion. It did not give further financial details.
L'Oréal said earlier in 2017 that it was reviewing strategic options for The Body Shop, which it bought for £652 million in 2006.
The Body Shop was founded in 1976 in Brighton, England, and has been at the forefront of the ethical beauty movement, using natural ingredients to manufacture cosmetics products and refusing to test on animals. The business now has 3,000 stores in more than 60 countries, L'Oréal said. In 2016, The Body Shop had net sales of €921 million, a fall of 4.8%. The brand has struggled in recent years as other retailers have developed their own ethical products.
Natura was founded in 1969 and sells cosmetics and hygiene and beauty products in South America, the U.S. and France. In 2016, the company reported a net revenue of 7.91 billion Brazilian reals and exercised an option to take full ownership of Aesop, an Australian cosmetics brand.
Jean-Paul Agon, L'Oréal's chairman and CEO, said in a statement that Natura would support The Body Shop's long-term growth and continue to "nurture the brand DNA around naturality and ethics." Natura said in a separate statement that it had secured the funds required for the deal and that completion would require regulatory approval in a number of jurisdictions, "notably in Brazil and the United States."
"The ethical values and expertise of Natura makes it the perfect new owner for The Body Shop to accelerate the rejuvenation of the brand and its future expansion," said Jeremy Schwartz, chairman and CEO of The Body Shop.
As of June 8, US$1 was equivalent to 3.29 Brazilian reals.