Beiersdorf acquires Coppertone for US$550 million; beauty a major magnet as 12 million Australians shop at pharmacies; Nestle in exclusive talks to sell skin health business for US$10.1 billion; and the 10 most valuable beauty brands of 2019.
Beiersdorf acquires Coppertone for US$550 million
The US is the world's largest suncare market and Coppertone has an iconic status. The first suncare brand launched in the American market in 1944, sales topped US$213 million in 2018. When multinationals seek to expand their presence in the US market, a preferred option is to acquire a best-selling American brand, as L'Oréal did with Maybelline and CeraVe and Shiseido with Bare Escentuals.
Beiersdorf, the maker of Nivea, has been a major pioneer in European suncare for over 60 years with the Nivea Sun and Eucerin Sun franchises. But the German multinational has acquired Coppertone from Bayer, one of the world's largest pharmaceutical companies, for US$550 million to spearhead growth in the US suncare market. Bayer acquired Coppertone in 2014 as part of a US$14.2 billion buyout of the consumer healthcare business of Merck, also a major player in pharmaceuticals.
Beiersdorf acquires the global products rights to Coppertone, notably in the US, Canada and China, and also takes over the brand's 450 dedicated brand personnel, R&D capabilities and major US production facility.
Beauty a major magnet as 12 million Australians shop at pharmacies
Australians are very happy with the major pharmacy chains reveals the latest Roy Morgan Pharmacy/Chemist survey. All of the major groups – Guardian, Priceline Pharmacy, TerryWhite Chemmart, Discount Drug Stores, Chemist Warehouse and Amcal/Amcal Max scored an above 90 per cent satisfaction rate. Close to 12 million Australians shop at pharmacies/chemists in the average six month period, reports the researcher. Over half – 56 per cent – are women (6.7 million) and 44 per cent are men (5.2 million).
Michelle Levine, CEO, Roy Morgan, says that although Australian women are increasingly turning to the Internet to buy health and beauty products, pharmacies and chemists continue to play a dominant role. "In 2018 a significant 42 per cent of Australian women who buy cosmetics in an average six months bought these products from pharmacies and chemists – up 9 per cent from four years earlier. This increase came at the expense of other outlets including supermarkets, department stores and discount department stores that all experienced a decline in their shares in this market".
Of equal importance to beauty brands are the demographics of the shoppers at the major pharmacy chains, notes Levine. "My Chemist, Priceline Pharmacy and Soul Pattinson are patronised by more members of Generation X (aged 40 to 54) than any generation and market leader Chemist Warehouse counts Gen Y (aged 25 to 39) as their largest customer group by generation".
Nestle in exclusive talks to sell skin health business for US$10.1 billion
In early April, industry players such as Unilever and Colgate-Palmolive were still in the running to bid for Nestle's Skin Health division. L'Oréal had dropped out of contention earlier in the race to acquire the business valued at between US$8 billion and US$10 billion. Some of the world's leading private equity giants, Advent International, KKR & Co and the Carlyle Group also decided to move to fade out.
The Nestle Skin Health division includes global-bestselling brands such as Cetaphil, Proactiv and Benzac, the dermal filler Restylane and Dysport, the main European rival to Botox. The Swiss multinational has entered exclusive talks with a consortium led by Swedish private equity firm EQT Partners, including the Abu Dhabi Investment Authority and PSP Investments, one of Canada's largest pension investment managers. The Skin Health division had global sales of US$2.8 billion in 2018 and the acquisition deal with the consortium values the unit at US$10.1 billion.
The 10 most valuable beauty brands of 2019
Brand Finance, the international branded business valuation consultancy, issues a sheaf of ranked lists from the World's Top 500 Brands to the most valuable soccer teams. The company uses different methodologies and evaluates 3500 brands worldwide overall. With offices in 20 countries, including Australia, the results are in for this year's Top 50 cosmetic and personal care brands. Here are the Top 10 ranked by marketing investment, stake holder equity and business performance.
- Johnson's, the flagship brand of J&J - valued at US$14.1 billion - down 20 per cent
- Chanel - valued at US$11.48 billion - up 95 per cent
- L'Oréal Paris - valued at US$10.74 billion - up 10.8 per cent
- Gillette - valued at US$8.14 billion - up 8 per cent
- Neutrogena - valued at US$6.98 billion - up 5.4 per cent
- Nivea - valued at US$6.85 billion - up 6 per cent
- Christian Dior - valued at US$6.3 billion - up 56.7 per cent
- Clinique - valued at US$5.38 billion - up 6.8 per cent
- Shiseido - valued at US$5.24 billion - up 24 per cent
- Guerlain - valued at US$5.069 billion - down 4.5 per cent
Snippets from the Wires
- In January, Tiffany Masterson, the founder of US cult brand Drunk Elephant, revealed that the fast-growing indie was exploring the possibility of a sale. According to a report from Bloomberg, the financial data and media service, Unilever is believed to have indicated interest in a buyout valued at US$1 billion.
- Zara Australia has announced a 35 per cent jump in net profit for the 12 months ended January 31st to AUD$12 million – up from AUD$8.9 million for the same period a year earlier. Full year sales also spiked 10.5 per cent to AUD$311.7 million – up from AUD$282 million.
- As we reported recently, Natura is still in advanced talks to buy Avon Products, the direct seller's global business. News agencies are reporting that the Brazilian heavyweight, which owns The Body Shop and Aesop, has negotiated finance from three major banks for the potential acquisition.