Unilever has agreed to buy South Korean cosmetics maker Carver Korea for 2.27 billion euros (US$2.7 billion) to gain a stronger foothold in the world’s fourth-largest skincare market.
Unilever will buy the maker of AHC skincare products from shareholders including Goldman Sachs Group Inc and Bain Capital Private Equity, the London and Amsterdam-based company said in a statement yesterday.
Carver had sales of 321 million euros last year.
For the Anglo-Dutch consumer goods giant, whose brands include Ben & Jerry’s ice cream and Dove soap, the acquisition marks a shift from other recent purchases in niche areas, such as organic tea and vegan mayonnaise, as chief executive Paul Polman pursues a commitment to sustainability.
The company has also been building up a “prestige” arm within its personal care business, targeting high-end brands founded in developed markets, such as Dermalogica, Ren and Murad.
Skincare sales in South Korea could reach US$6.3 billion this year and interest in the Asian country’s cosmetics companies has been heating up.
Bain Capital in April agreed to invest about US$816 million in beauty-products maker Hugel Inc. AHC’s products include moisturizers, toners and sun protection.
South Korean cosmetics companies had robust growth in past years, helped by strong Chinese demand, which has weakened recently amid geopolitical disputes in the region. Operating profit of Amorepacific Corp, South Korea’s largest cosmetics company, dropped 58 percent in the second quarter.
Goldman and Bain bought an 80 percent stake last year, when the company had earnings before interest, taxes, depreciation and amortization of 137 million euros.
While the price Unilever is paying seems “superficially high,” the deal makes sense strategically, said Martin Deboo, an analyst at Jefferies with a “buy” rating on Unilever shares.
“It’s right at the top-end of what Unilever’s paid for things, but it’s pretty profitable and 35 percent of the sales go to China, so they’re acquiring right in the heartland of current beauty trends,” he said by phone.
Unilever shares yesterday fell as much as 0.9 percent early in London.
Last week, Unilever agreed to a US$900 million asset swap with South African investment company Remgro Ltd to reorganize its business in that country.
Unilever has said investors should expect it to spend between 1 billion euros and 3 billion euros on takeovers every 12 months to accelerate its push beyond mainstream products and into healthier or ethically sourced brands.
Many of Unilever’s recent acquisitions have focused on its food arm, where it is also moving to sell its slower-growing spreads division.
However, the company has also been adding to its personal-care brands with deals like the purchase of brands such as Savital shampoo from Latin America, consumer goods giant Quala, in May, and Dollar Shave Club, last year.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by