L’oreal set to sell the Body Shop to Brazilian cosmetics giant

Natura in exclusive talks over €1bn deal to buy ethical chain founded by Anita Roddick

FRENCH cosmetics giant L’oreal has entered exclusive talks to sell the Body Shop chain to Brazilian make-up company Natura Cosmeticos, owner of the beauty brand Aesop.

L’oreal said Natura had made a firm offer valuing Body Shop, including debt, at €1bn (£880m) and beating off interest from the private equity firm CVC and Fosun, the Chinese conglomerate that has an 11pc stake in the UK tour operator Thomas Cook.

The French company, which bought Body Shop for £652m in 2006, put the business up for sale following a review announced earlier this year.

The Body Shop was founded by Anita Roddick in 1976 and quickly became a pioneer for ethical and natureinspired beauty products. It floated in London in 1984 but it has faced fierce competition in recent years from rivals also offering products based on natural ingredients and no animal testing.

Today the Body Shop operates in more than 60 countries through 3,000 stores, concessions and online shops. In 2016 it generated retail sales of around €1.5bn and net sales of €921m.

Natura Cosmeticos, meanwhile, was founded in 1969 and is one of Brazil’s largest cosmetics manufacturers with $3bn (£2.4bn) revenues. Based in São Paulo, the company sells its cosmetics and household products door to door in Latin America and employs around 7,000 staff in seven countries: Brazil, Argentina, Chile, Mexico, Peru, Colombia and France.

It became a public company listed on the São Paulo stock exchange in 2004 and bought the Australian upmarket beauty brand Aesop in 2013.

More than 1.4m consultants – including 1.17m in Brazil and around 246,000 abroad – market the company’s products to consumers. It is one of the founding members of the global Union of Ethical Biotrade, a Swiss-based nonprofit that promotes biodiversity and sustainable business and it does not test on animals.

L’oreal shares ended up 0.7pc on the Paris bourse yesterday.

Jean-paul Agon, chairman and chief executive of L’oreal, said: “I am very pleased to announce Natura as the potential new ‘home’ for the Body Shop.

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