L’Oreal Buys Hair-Color Maker Niely in Continued Expansion SpreeAndrew Roberts
L’Oreal SA, the world’s largest cosmetics company, agreed to buy Brazilian hair-color maker Niely Cosmeticos Group, continuing an acquisition spree that has seen it spend more than $5 billion on deals this year.
Niely is the largest independent hair coloration and hair-care company in Brazil, with revenue of 405 million Brazilian reals ($181 million) last year, Paris-based L’Oreal said today in a statement.
Niely’s “excellent position and high penetration” among Brazil’s growing middle class “will positively complement the products offered by our consumer products division,” Didier Tisserand, L’Oreal Brazil president, said in the statement. Daniel Fonseca de Jesus, who founded Niely in 1981, will join the L’Oreal’s Brazil strategic committee as vice president.
L’Oreal, which didn’t disclose how much it will pay for Niely, said in July it planned to make more acquisitions as it contends with weak gains in consumer products, its largest division. Since January, the company has spent more than $5 billion on deals, including the buyback of 8 percent of its stock from Nestle SA and the purchases of facial mask-maker Magic Holdings International Ltd. and spa brands Decleor and Carita.
L’Oreal, which gets more than 8 percent of revenue in Latin America, is seeking to add 50 million new customers in Brazil by 2020, targeting consumers that spend more per capita on cosmetics than in any other so-called BRIC nation. Niely’s Cor & Ton hair coloration and Niely Gold shampoos are widely distributed, and the company has industrial and logistical facilities in Rio state, L’Oreal said.
L’Oreal shares declined 0.9 percent to 127.35 euros as of 9:44 a.m. in Paris. The stock has dropped 0.3 percent this year, compared with a 4.3 percent gain in the CAC 40 index, of which it is a member.