L'Oreal in talks to sell The Body Shop to Natura

French cosmetics giant L’Oreal announced on Friday that, following an “extensive” review of strategic options for its The Body Shop division to “ensure its best future development”, the group had received a firm offer from Natura Cosméticos to acquire The Body Shop, and as a result had entered into exclusive discussions with Natura.

The CAC 40 component said the proposed transaction valued The Body Shop at an enterprise value of €1bn.

Acquired by L'Oréal in 2006, The Body Shop was described by the group’s board as a “British iconic brand”, focusing nature-inspired products.

It was founded in 1976 by Anita Roddick in Brighton, and had expanded into a “global leader” in ethical and natural beauty.

The Body Shop was now present in more than 60 countries around the world, through various distribution channels including more than 3,000 point of sales and e-commerce.

In 2016, it generated retail sales of around €1.5bn and net sales of €921m.

“I am very pleased to announce Natura as the potential new ‘home’ for The Body Shop,” said L’Oreal chairman and CEO Jean-Paul Agon.

“It is the best new owner we could imagine to nurture the brand DNA around naturality and ethics.”

Agon said Natura would support The Body Shop development in the long-term and enable it to “best serve” its customers, while respecting its strong commitments towards its employees, franchisees and stakeholders.

“I would like to thank all The Body Shop employees and partners around the world for their contribution to the development of the brand over the past eleven years and I am confident they will be in the best hands for the future.”

Chairman and CEO of The Body Shop, Jeremy Schwartz, said he was “sure” that all customers, employees, franchisees and stakeholders of the company would “welcome” L'Oréal's decision to enter into exclusive discussions with Natura.

“The ethical values and expertise of Natura make it the perfect new owner for The Body Shop to accelerate the rejuvenation of the brand and its future expansion.”

The proposed transaction would be submitted to L'Oréal's employee representative body, and remained subject to regulatory approval in at least Brazil and in the United States.

L’Oreal said it expected the transaction to close before the end of the year.