Johnson & Johnson buys into Japanese skin care and cosmetics company Dr.Ci:Labo

By Deanna Utroske contact

- Last updated on GMT

Johnson & Johnson buys into Japanese skin care and cosmetics company Dr.Ci:Labo
The deal announced this week includes widespread sales rights to select products and is also meant to improve J&J’s prowess in the skin care sector.

The Japanese beauty brand Dr.Ci:Labo got its start in 1999 as a mail-order skin care company with a portfolio of just six products. Among that small collection was the company’s signature product, Aqua Collagen Gel. In December of last year the company had a corporate restructuring and Ci:z Holdings was born.

Now, according to Nikkei, J&J is buying up nearly 20% of the Ci:z Holdings entity.

Terms and sales rights

As part of the deal, J&J is acquiring “sales rights to its main cosmetics lines in areas outside Japan,” ​reports Nikkei. That line is Dr.Ci:Labo, which to date, “has been marketed in various parts of Asia as a medical cosmetic that doctors helped develop.”

According to Nikkei, it’s a J&J subsidiary that is buying 19.9% stake in Ci:z to become the company’s second largest stakeholder. “Founder and Chairman Yoshinori Shirono will sell a portion of his stake in the deal, and stock warrants will also be issued through which the Japanese company will procure up to 3.5 billion yen ($34 million),” ​as Nikkei describes it.

The deal also includes a provision for two J&J company leaders to join the Ci:z board.

Skin care category

The upshot of this latest J&J transaction looks to be another gain in the global skin care market. “Johnson & Johnson also markets medical cosmetics under the brand name Neutrogena and through its investment in Ci:z aims to strengthen its skin care business, in which Japanese manufacturers excel,” ​reports Nikkei.

And according to reports, J&J will first expand the reach of Dr.Ci:Labo in Asia, namely China and Taiwan. Then the company intends to focus on selling the brand across Europe and in the States as well.

Buying up business

In April of this year J&J made another move to strengthen its position in the skin care category. The company acquired NeoStrata, known for its skin care and anti-aging products. “NeoStrata's legacy in dermocosmetics will complement our global Consumer portfolio and enable us to deliver advanced skin care brands to consumers around the world,” ​Jorge Mesquita, worldwide chairman of the consumer division at Johnson & Johnson, told the press at that time​.

And just last month, J&J made a play in the hair care space, buying Vogue International​ for slightly more than $3bn in cash. Mesquita’s quick comment on that deal is similarly optimistic about the company’s growing international presence: “Our acquisition of Vogue International's full line of leading advanced hair care products sold in the U.S. and in 38 countries will strengthen our global presence in this important category.”

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