Unilever buys South Korean cosmetics maker for US$2.7bil

LONDON: Unilever agreed to buy a South Korean cosmetics maker for 2.27 billion euros (US$2.7bil) to gain a stronger foothold in the world’s fourth-largest skincare market, betting that the pop-culture-fuelled appeal of the country’s beauty products will outweigh concerns over regional tensions. Unilever will buy Carver Korea, maker of AHC skincare products, from shareholders including Goldman Sachs Group Inc and Bain Capital Private Equity, the London- and Amsterdam-based company said in a statement yesterday. Carver had sales of 321 million euros last year. For the Anglo-Dutch consumer-goods giant, whose brands include Ben & Jerry’s ice cream and Dove soap, the acquisition marks a shift from other recent purchases in niche areas like organic tea and vegan mayonnaise as chief executive officer Paul Polman pursues a commitment to sustainability. The company has also been building up a “prestige” arm within its personal care business, targeting high-end brands founded in developed markets, such as Dermalogica, Ren and Murad. Skincare sales in South Korea will reach US$6.3bil this year, and interest in the Asian country’s cosmetics companies has been heating up. Bain Capital agreed to invest about US$816 million in beauty-products maker Hugel Inc. in April. AHC’s products include moisturisers, toners and sun protection. Korean cosmetics have grown popular in the Asia-Pacific region alongside a boom in the country’s cultural exports. Many of the leading brands, which compete with Japan’s Shiseido Co, Kose Corp and others, use Korean celebrities to front their advertising campaigns. “The Korean Wave, driven by K-pop and TV series, created a desire among Asian consumers to look and feel like Korean celebrities,” said Sunny Um, a Singapore-based analyst at Euromonitor. Korean cosmetics companies have borrowed a page from fast-fashion brands like Zara, speeding up the product development cycle to keep a sense of freshness, Um said. They’ve also appealed to Chinese consumers by using herbal ingredients that are trusted in that country. Many of Unilever’s recent acquisitions have focused on its food arm, where it’s also moving to sell its slower-growing spreads division. But the company has also been adding to its personal-care with deals like the purchase of brands such as Savital shampoo in May and Dollar Shave Club last year.