L’Oreal buys into Chinese Magic
Print Edition
French cosmetics giant L’Oreal Group yesterday said it has reached an agreement to buy Chinese skin care company Magic Holdings International for US$840 million to help it expand in China’s fast-growing beauty market.
L’Oreal’s proposal has received the support of six key shareholders of Magic Holdings who own about 62.3 percent of the company, according to a joint statement yesterday.
The price represents a 26 percent premium over the average closing price of Magic Holdings in the past 30 trading days.
The deal is subject to Ministry of Commerce approval.
“L’Oreal intends to develop the Chinese brand by contributing its scientific research expertise and leverage its advanced and applied research in its China Research and Innovation Center and across the world,” the statement said.
Hong Kong-listed facial mask producer Magic Holdings reported 1.2 billion yuan (US$196 million) sales last year, up 29 percent from a year ago, and a profit of 176 million yuan.
Its shares will be delisted after completion of the acquisition.
Magic is the local market leader in the rapidly expanding product category of facial masks, with 26 percent market share last year, according to AC Nielsen data.
L’Oreal has the largest market share in both color cosmetics and the skin care sector in China, according to market research firm Euromonitor International.
China’s overall skin care market size is expected to grow to 358 billion yuan by 2015 from 257 billion yuan at the end of 2012, Euromonitor said.
China is the French company’s third-largest market behind the US and France.
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