L’Oréal has signed an agreement with Natura &Co to acquire Aēsop, the Australian luxury beauty brand, for an enterprise value of US$2.5 billion.

The group confirmed that China and the travel retail channel have been earmarked as key growth markets for this latest addition to the luxury division’s portfolio.

Established in 1987, Aēsop is well-known worldwide for its prestige, plant-based skin, hair and body products, presented in the brand’s distinctive, amber packaging.

Aēsop currently operates around 400 points of sale across the Americas, Europe, Australia, New Zealand, and Asia, with a nascent footprint in China, where the first store opened in 2022. The brand posted sales of US$537 million in 2022.

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L’Oréal Groupe Chief Executive Officer Nicolas Hieronimus commented: “I am very excited to welcome Aēsop and its teams to the L’Oréal Groupe family. Aēsop is the epitome of avant-garde beauty, whose products are not only made with great care and exceptional attention to detail; they are a superb combination of urbanity, hedonism and undeniable luxury.

“Aēsop taps into all of today’s ascending currents and L’Oréal will contribute to unleash its massive growth potential, notably in China and travel retail.”

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L’Oréal Luxe President Cyril Chapuy added: “My team and I are thrilled to have Aēsop join the L’Oréal Luxe portfolio of iconic global brands.

“Aēsop holds a very unique positioning on the global luxury beauty market thanks to its design-led brand essence, its highly efficacious and sensorial products, as well as its customer-obsessed retail philosophy.

“We look forward to welcoming Aēsop’s CEO Michael O’Keeffe and his experienced and passionate teams to continue to grow together the brand’s remarkable potential, by carrying on cultivating its uniqueness and its values.

“We have great confidence that Aēsop will join the L’Oréal Luxe Billionaire brands club and therefore contribute significantly to the growth of the Division in the years to come.”

Brazilian cosmetics company Natura &Co acquired Aēsop in 2013. The company said the sale would free up resources to focus more on other brands, such as The Body Shop, which it acquired from L’Oréal in 2017.

READ MORE: L’Oréal hopes to sell The Body Shop for €1bn to Natura

Natura &Co Chief Executive Officer Fábio Barbosa commented: “The divestment of Aēsop marks a new development cycle for Natura &Co.

“With a strengthened financial structure and a deleveraged balance sheet, Natura &Co, exercising strict financial discipline, will be able to sharpen its focus on its strategic priorities, notably our investment plan in Latin America.

“We will also be able to concentrate on continuing to improve The Body Shop’s business and refocusing Avon International’s footprint.”

He added: “We are proud of the remarkable success of the Aēsop brand, and we are extremely grateful to all Aēsop’s associates, who contributed immensely not only to Aēsop’s success, but also to making Natura &Co what it is today.

“We are confident that Aēsop’s growth story will continue under the ownership of L’Oréal and wish Aēsop continued success in this new chapter.”