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Published: Wed, September 27, 2017
Economy | By Melissa Porter

Unilever buys Korean cosmetics firm for $2.7b

Unilever buys Korean cosmetics firm for $2.7b

Consumer goods giant Unilever has struck a €2.27bn deal to buy South Korean cosmetics firm Carver Korea.

Global beauty company Unilever acquires Carver Korea, a Korean makeup brand that became famous through its AHC line, for 3 trillion won (US$2.7 billion). Carver ranks as the third-largest cosmetics company in South Korea, following AmorePacific and LG Household & Healthcare. "It will significantly strengthen our position in North Asia, the largest skin care market in the world".

The range of products now includes its hero line "Eye Cream for Face", along with essences, toners, moisturisers, masks and sun protection.

It is the Anglo-Dutch company's biggest acquisition in six years and comes six months after it fended off a £115 billion takeover attempt by Kraft Heinz, Alex Ralph points out for the [London] Times.

The deal delivers a whopping profit for the two global investment companies which purchased a 60-percent stake in Carver Korea for 430 billion won ($397 million) in June previous year.

Some argue that a company like Carver is safe from a backlash thanks to the popularity of its products in China, while others take the view that there is a serious threat and that South East Asia is a better bet for expansion.

Unilever has plans to grow its personal portfolio. "That would have valued the whole company at $833 million, less than a third of what Unilever is paying, but Carver's net profit almost quadrupled a year ago to $117 million, from $32 million in 2015, public filings show", they write.

The deal announced on Monday gives Unilever what it said is the fastest-growing skincare business in South Korea through its AHC brand of anti-ageing creams, moisturisers and other skin products.

Bain and Goldman held 60.39 percent of Carver at the end of 2016, while its founder Lee Sang-rok held a 35 percent stake. "Unilever is a strong partner to help the company in its next phase of growth and development".

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