Brazil’s Natura set to buy Body Shop in $1.1B deal

RETAIL

• Brazilian cosmetics firm Natura Cosmeticos SA is set to acquire U. K. re t ail er The Body Shop in a 1 billion- euro (US$1.1 billion) transaction.

Natura made a firm offer for the lotions and soaps chain and has entered exclusive discussions, Body Shop owner L’Oreal SA said in a statement Friday, more than four months after announcing it was exploring strategic options for the business.

An acquisition by Natura would represent a major expansion of the Brazilian cosmetics company’s retail activities, following up on its US$ 70 million purchase of Australia’s Aesop in 2013. For L’Oreal, a sale would end more than a decade of ownership, during which Body Shop has struggled with heavy competition.

“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 U. K. chain’s chairman and chief executive officer Jeremy Schwartz said in the statement.

Natura l ooks to have beaten off competition from private- equity bidders for the business, which British entrepreneur Anita Roddick founded in 1976. CVC Capital Partners, Advent International Corp. and Investindustrial Advisors SpA were among firms that made proposals, according to people familiar with the matter.

The Body Shop has more than 3,000 locations worldwide, about two- thirds of which are franchised. Its operating profit fell 38 per cent to 33.8 million euros last year.

Natura is coming out of a tumultuous year that saw the exit of chief executive officer Roberto Oliveira de Lima, whose attempt to raise prices backfired.

The 1 billion-euro value of the proposed transaction includes debt.