L'Occitane agrees to buy skincare brand Elemis for US$900m

[HONG KONG] Luxury cosmetics firm L'Occitane International SA agreed to buy privately held beauty and skincare brand Elemis for about US$900 million as it seeks to build its presence in the UK and the US.

The Hong Kong-listed company agreed to buy Elemis USA from Steiner Leisure, an international business firm incorporated under Bahamas laws, and Elemis Ltd, a firm incorporated in England and Wales, from private firm Nemo UK, according to a Hong Kong Stock Exchange filing on Sunday.

L'Occitane said the acquisition will help bolster the group's growth globally and Elemis will leverage on the acquirer's geographical presence to expand into new markets. The buyer has a global presence in 90 countries, 3,285 retail outlets, including 1,555 stores directly operated by the group, and more than 8,500 employees, according to its website.

The purchase will be funded by L'Occitane's cash and bank borrowings. The deal is expected to close in the first quarter of 2019, according to the filing.

"This is L'Occitane's largest acquisition since listing and a major step forward in building a group of premium beauty brands," Reinold Geiger, chief executive officer of the firm, said in a statement.

L'Occitane, which reported 1.3 billion euros (S$2.02 billion) in net sales and 141 millions euros in operating profit last fiscal year, listed in Hong Kong in 2010 as it sought to expand in Asia. The firm is a natural ingredients-based cosmetic products maker with origins in Provence, France.

Shares of L'Occitane have advanced 6.6 per cent this year, giving the company a market value of US$2.9 billion. The stock was little changed in 2018.

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