03:03 - Source: CNN
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Hong Kong CNN  — 

L’Oréal is buying Australian brand Aesop in a deal that values it at $2.5 billion, in the biggest brand acquisition ever made by the French beauty giant.

The sale was announced Monday by Aesop’s parent, Brazilian firm Natura & Co, which also owns The Body Shop and Avon.

It brings Aesop, which is known for its luxury skin and body care products, under the same umbrella as brands such as Garnier and Maybelline.

The deal would be L’Oréal’s largest acquisition of another brand on record, followed by its $1.7 billion purchase of YSL Beauté in 2008, according to data from Dealogic.

Natura & Co bills itself as Brazil’s largest beauty and cosmetics company, operating in more than 100 countries. In a statement Monday, the firm’s CEO Fabio Barbosa said the divestment of Aesop would help it reduce debt and hone in on other paths for growth.

“With a strengthened financial structure and a deleveraged balance sheet, Natura & Co, exercising strict financial discipline, will be able to sharpen its focus on its strategic priorities, notably our investment plan in Latin America,” he said.

Aesop was founded in Melbourne, Australia in 1987. Natura picked up a 65% stake in the company in 2012, and formally acquired it in 2016.

Since then, Aesop’s sales have skyrocketed nearly 20 times — from $28 million in 2012 to $537 million in 2022, according to Natura. Over the past year, Aesop posted double-digit growth in revenue.

The company sells its products, which include exfoliating hand wash, scented body lotions and incense kits, in 29 markets. The brand is hoping to push further into mainland China especially, where it opened its first brick-and-mortar stores last year.

“Aesop taps into all of today’s ascending currents,” L’Oréal CEO Nicolas Hieronimus said in the statement. “L’Oréal will contribute to unleash its massive growth potential, notably in China and travel retail.”

The deal is expected to close in the third quarter of this year.