CHINA. L’Oreal continues to bolster its presence in China through the acquisition of the mass-market skincare brand Mininurse.
The French beauty giant said in a statement that it had signed an agreement of intent to buy Mininurse, which was launched in China in 1992, and its manufacturing facility in Yichang, Hubei province.
Terms of the deal were not disclosed, but analysts estimate L’Oreal paid between US$49-146 million at current exchange rates, for the company.
Mininurse, which is distributed in some 280,000 outlets China-wide, has a strong image and is expected to generate sales of about $48.6 million (€39.4 million), at current exchange rates, this year, said L’Oreal in a statement. The skincare brand ranks third in the country’s mass skincare market with a 5% market share. Procter & Gamble ranks first, with a 17% share, followed by Dobao, with 7%, according to an HSBC research note.
“This acquisition is an outstanding opportunity to speed up our growth in the Chinese market. It is a major step forward in L’Oréal’s development in a market which is strategically important for the group”, said L’Oréal chairman and ceo Lindsay Owen-Jones.
L’Oréal China general manager Paolo Gasparrini added: “Aimed at young women with a natural style, Mininurse complements our brand portfolio perfectly, and enables us to move more quickly into the Chinese consumer skincare market”.
Certain conditions must be met in China before completion of the transaction, which is subject to the approval of the Chinese authorities. The business will be consolidated during the first half of 2004.
L’Oréal has been operating on the Chinese market since 1997, and its sales amounted to € 113 million (US$139.5 million) in 2002. In China the group achieved +66% growth in sales in local currency terms in the first nine months of 2003, which is broadly in line with the 2002 figure.
The L’Oréal group has rolled out its core brands in this market, and holds several market leader positions: L’Oréal Paris in premium colourants, Maybelline in make-up, Vichy in products sold in pharmacies and Lancôme in selective distribution.
