L'Oreal takes over The Body Shop

Published: 1-Apr-2006


After weeks of speculation, L’Oréal has confirmed its takeover of The Body Shop, which celebrates its 30th birthday this year.

The French beauty giant will pay £652m in cash for the entire issued share capital of The Body Shop, a 31.5% premium of the company’s average share price over the last six months, coming out at 300 pence per share.

“The acquisition of The Body Shop will broaden L’Oréal’s existing portfolio, adding a complementary brand with a strong identity and values. L’Oréal is committed to preserving and upholding those values,” says L’Oréal. It gives the French group access to a naturally positioned brand and a clear position in the masstige channel.

The Body Shop has 2085 retail outlets in 54 countries and posted revenue of £419m in the year ending 26 February 2005 on sales of £700m. L’Oréal says that while access to its R&D and marketing expertise will enhance The Body Shop’s product offer, it is committed to developing the UK naturals manufacturer and retailer as a standalone entity within its group portfolio and its stores will continue to sell only Body Shop branded products.

Commenting on the deal, The Body Shop chairman Adrian Bellamy said: “This combination of our two great organisations will provide significant strategic impetus to The Body Shop’s growth plans for its three retail channels of stores, direct selling and e-commerce around the world.”

L’Oréal says that it will continue to work with The Body Shop’s existing management team, which will report directly to L’Oréal’s ceo-designate Jean-Paul Agon. Dame Anita Roddick will stay on as consultant and has also accepted an invitation to become a consultant to L’Oréal to share her experience in community trade. Roddick described the deal as “without doubt the best 30th anniversary gift The Body Shop could have received”.

The group expects the acquisition to be EPS neutral in the financial year to 31 December 2006, and EPS accretive thereafter.

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