L'Oreal buys Body Shop for EUR 940 million

17th March 2006, Comments 0 comments

PARIS, March 17, 2006 (AFP) - L'Oréal, the world's leading cosmetics company, said Friday it would buy Body Shop International, renowned for its ethical hair and skin products, for 652 million pounds (EUR 940 million euros).

PARIS, March 17, 2006 (AFP) - L'Oréal, the world's leading cosmetics company, said Friday it would buy Body Shop International, renowned for its ethical hair and skin products, for 652 million pounds (EUR 940 million euros).

L'Oréal will pay 300 pence a share for Body Shop, which will be maintained as a separate entity and continue to be led by its current management team, the French firm said in a statement.

The offer price is 31.5 percent higher than Body Shop's average share price over the six months before February 21, the last day before speculation of a bid emerged, the companies said in a statement.

Body Shop directors holding about 21.6 percent of share capital — including company founders Anita and Gordon Roddick with 18 percent — have accepted the offer.

On the Paris stock exchange in early trading, the price of shares in L'Oréal rose 0.7 percent to EUR 75.15 after the news of the purchase.

"The acquisition reinforces the portfolio of L'Oréal brands with a brand that is very complimentary and with a strong identity and strong values. L'Oréal undertakes to respect these values," the company said in a statement.

The Body Shop was founded in 1976 by Anita Roddick, who rapidly expanded the business from modest beginnings with a determination to offer products which had not been tested on animals and used natural products. Body Shop was a leader in the so-called ethical business sector and developed a high-profile brand.

But as other retailers leaped aboard the natural beauty bandwagon, Body Shop struggled, with Roddick stepping down as chief executive in 1998.

It has about 1,900 shops in 50 countries, with its main markets being Britain and the United States. It posted sales of 419 million sterling (EUR 603 million) in the 52 weeks to February 26.

L'Oréal, which owns the brands Lâncome, Garnier and Maybelline lipsticks, reported in February a sharp rise in underlying net profit in 2005 owing to expansion in emerging markets and North America.

The group said the results marked 21 years of annual profit increases of 10 percent or more, saying net profit had risen by 37 percent on a comparable basis to EUR 1.97 billion and signalled that it was looking for acquisitions.

L'Oréal was among leading luxury goods and perfume companies fined a total of EUR 46.2 million this week by the French competition authority for price-fixing.

L'Oréal rejected all accusations of price-fixing with the distributors of its perfumes and said it was considering launching an appeal.

Copyright AFP

Subject: French news

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