The Face Shop, budget cosmetic label of South Korea’s beauty care maker LG Household & Healthcare Ltd., will buy a full stake in China’s cosmetics company Avon Manufacturing (Guangzhou) Ltd. for 79.38 billion won (US$70.8 million).
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The payout would be in 49.3 billion won in cash and 30 billion won in cashable assets, the company announced in a disclosure.
Built on 74,500 square meters of land, Avon’s Guangzhou factory, which founded in 1994, manufactures 13,000 tons of beauty products annually, ranging from skin care to makeup, hair and body products. All facilities meet the US Food and Drug Administration’s Current Good Manufacturing Practices, according to the firm.
At the moment, the deal looks a win-win for both companies: “We are delighted to have reached this agreement with Avon and added modern hardware with powerful capabilities for producing quality products for the rapidly growing local market. Our experience of cooperation with Avon in the past gives us a clear view of its brand influence and coverage of the world market, so we look forward to continuing our relationship with Avon, as both companies are looking for ways to expand our product lines, the rapid output desired products on the market and progress in the Asian market of each of them said Suk Cha, CEO of LG Household & Health Care”
“Working with local structure, which is consistent with our goal, we will be in a better position to use the significant opportunities in China and the wider Asian market, he Zijerveld. – We know LG H&H and believe that they will remain a strong partner of the Avon, as we collectively strive to develop our business in the region.”
The Face Shop led road shop brands that have spurred K-beauty boom, but like other peers that went under are challenged at home by online malls and health and beauty (H&B) stores.
The company expects the acquisition of the Chinese firm to provide it with an opportunity to revive its business.
(Source: Pulse News )