Unilever will buy Carver Korea for US$2.7 billion (about 3 trillion won), the multinational consumer goods company said.
Carver, the nation’s third-largest cosmetics company is famous for its signature AHC brand.
The acquisition is the largest M&A deal in the country’s cosmetics industry. The previous record was set by LG Household & Healthcare (LG H&H), which acquired The Face Shop for 466.7 billion won (US$411 million) in 2010.
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Unilever, which is co-headquartered in London and Rotterdam, said it has agreed to acquire 60.39 percent of the shares in Carver from Bain Capital Private Equity and Goldman Sachs consortium. The global investment companies purchased the shares in the Korean firm for 430 billion won last year.
Lee Sang-rok, the founder and chairman of Carver, is also set to sell his shares.
Industry officials regarded the latest deal as Unilever’s efforts to revive itself in the Chinese market.
Since it tapped into the Chinese market in 1986, Unilever has been unable to expand its presence there so far, due to the intense competition from Chinese domestic brands.
Its sales dropped 20 percent in the third and fourth quarter last year as well.
The slump has seemingly pressed Unilever to seek a brand that is popular among consumers there.
Specializing in eye cream and facial masks, Carver has expanded its presence in the Chinese market with its AHC brand. This compares to large Korean companies such as AmorePacific and LG Household & Healthcare have suffered from economic retaliations over the deployment of a U.S. missile defense system here.
Carver basked in spotlight by selling 650,000 facial masks on last year’s China’s Singles Day, the Chinese version of Black Friday.
The company posted 429.5 billion won in sales and 180.4 billion won in operating profits last year, despite the intensifying political conflict between Seoul and Beijing.
It also hired Hollywood star Anne Hathaway as the brand’s spokeswoman to attract global consumers.
“We are delighted to be acquiring Carver Korea,” Alan Jope, the president of Unilever’s personal care unit, said in a press release. “It will significantly strengthen our position in North Asia, the largest skincare market in the world.”
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Some observers, however, said Carver has also been wary of China’s economic retaliation and this urged the management to sell the company for the high price in a hurry.
They said Carver’s growth curve has reached the highest point and that its margins have slowed.
Given that Korea’s cosmetics industry is expected to face a falloff, critics pointed out that the price paid for Carver was too much.
(Source: Korean Times)