Daily Management Review

L'Oreal to buy three cosmetic brands from Canadian Valeant


Canadian pharmaceutical company Valeant will sell three its cosmetics brand to L'Oreal for $ 1.3 billion, Bloomberg reported, citing the statement of the French cosmetics and perfumes manufacturer.

MTA New York City Transit / Marc A. Hermann
MTA New York City Transit / Marc A. Hermann
Under the deal, Valeant will sell three skin care products: CerAve, AcneFree and Ambi. Annual sales of these brands amounted to $ 168 million. L'Oreal reported that the three brands will be included in the company's medical cosmetics unit, which already features brands such as La Roche-Posay, Vichy and SkinCeuticals.

Valeant also announced sale of its unit Dendreon Pharmaceuticals to Chinese company Sanpower Group for $ 820 million, Bloomberg notes.

These three brands are expected to twice increase income of L'Oréal’s department of active cosmetics in the United States, and will help the company meet growing demand for skin care products at affordable prices, commented Frédéric Rozé, President and CEO of American L'Oréal.

Founded in 2005, CeraVe has cleaners and moisturizers, baby products, and is one of the fastest growing brands of active skin care products in the United States, with annual sales growth of more than 20 percent over the past two years.

AcneFree provides acne treatment and skin cleaning, and Ambi makes products for treatment of dark spots and skin lightening.

L'Oreal said the three brands will stand alongside the likes of Vichy and La Roche-Posay in the industry of niche active cosmetics. The segment is one of the most powerful in terms of growth and stability to slowdown in consumer spending in the last three to four years.

Earlier, management of L'Oreal announced strategic investments in Partech International Venture Vll fund specializing in investments in technology start-up company. The fund is managed by an investment company Partech Ventures. According to insider information, the leader of the world cosmetics and perfumery market plans to pour several million euros in the fund.

Partech International Venture Vll has already been supported by world famous companies as Nokia Corporation, Accenture and Cisco. The organization has already invest in development of business furniture online retailer made.com, and in table reservation service in catering establishments lafourchette.com.

L'Oreal’s Head of Digital Activities Lubomira Rochet said during a telephone conversation with Reuters that investment in high-tech start-ups will allow manufacturers of perfumery products to enrich their own brands, as well as to increase their awareness in the broad masses of the user environment. In addition, these investments should have a positive impact on other aspects of economic activity such as supply chain, and research and implementation of innovative technologies in the production process.

At the moment, L'Oreal is the market leader in perfumes and cosmetics, and is rightfully included in a list of the largest companies in the world. Over 107 years of existence, L'Oreal has been headed by just five general directors, and almost all of them gave been honored with various international awards. The main factor in the company’s success is an ability to innovate and to make acquisitions, which allows to increase its share in the relevant market segments.

source: bloomberg.com, reuters.com

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