Japanese cosmetics giant Shiseido Co said yesterday it will buy San Francisco-based Bare Escentuals Inc for US$1.7 billion, acquiring a maker of trendy makeup brands and advancing the company’s plan to boost its global presence.
Shiseido will offer to buy all outstanding shares of the company for US$18.20 a share, which represents a 43 percent premium over Bare Escentuals’ closing price on the NASDAQ on Thursday. The transaction, Shiseido’s biggest takeover deal, was unanimously approved by both boards of directors.
Bare Escentuals will operate as a separate division of Shiseido under its current leadership, Shiseido said. The 34-year-old company is known for its bareMinerals and Buxom cosmetic brands sold through US department stores, specialty retailers and direct marketing.
“Together with Shiseido, we look forward to bringing our mineral-based beauty products to even more women worldwide,’’ Bare Escentuals chief executive Leslie Blodgett said in a statement.
Shiseido is Japan’s biggest cosmetics company with operations in more than 70 countries. It wants to expand its global reach, however, and is aiming to boost overseas sales to 50 percent of overall revenue by 2017.
By adding Bare Escentuals, Shiseido’s overseas sales will rise to 42 percent of total sales from 38 percent, the company said. Moreover, it adds a lineup of trendy brands popular among women in their 20s, 30s and 40s looking for more natural alternatives to traditional products.
“This acquisition further enables Shiseido to move toward our goal of becoming a global player,’’ president Shinzo Maeda said.
Bare Escentuals’ business has climbed steadily in recent years, with net income up 11 percent in 2008 to US$98 million. Sales grew 9 percent to US$556.2 million. It is the dominant US player in the mineral foundation market.
Bare Escentuals will be able to tap lucrative Asian markets using Shiseido’s well-established distribution networks in the region, Maeda told reporters in Tokyo.
Blodgett, who owns 6 percent of Bare Escentuals, will maintain a smaller stake after selling 40 percent of her holdings to Shiseido.
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