A year of M&A: Beauty acquisitions, fragrance tie-ups and supplier shake-ups
There was a steady flow of mergers, acquisitions and business partnerships throughout 2019, particularly in fragrances. This round-up spotlights some of the most significant moves of the year.
Spritzing up! Fragrance M&A flurry
The fragrance category saw a fair amount of M&A movement this year, particularly from Swiss major Givaudan.
In May, it completed the acquisition of French naturals specialist Albert Vielle – a move set to contribute to the company’s 2020 strategy and push deeper into naturals. The acquisition also strengthened Givaudan’s position in the famed and historic Grasse area of France.
In July, Givaudan announced its acquisition of Munich-headquartered fragrance house Drom. The move aimed at further strengthening the company’s leadership position in the global fragrance market.
And in August, it acquired UK specialty manufacturer Fragrance Oils to strengthen its position in the UK, Africa and South East Asia. Fragrance Oils is specialised in perfumery essences and natural herbals.
Beyond Givaudan's M&A activity, and more recently in October of this year, international beauty major L’Oréal announced the acquisition of Clarins Group’s entire fragrance portfolio. The purchase included the iconic Mugler and Azzaro brands and is set to close at the beginning of next year.
In September, Swiss fragrance major Firmenich also announced it was taking a minority stake in French natural ingredients specialist Robertet – a move to align with its strategic focus on natural and sustainable ingredients. The company stated at the time it would also consider taking a controlling interest, if invited to do so.
Big brand moves - luxury tie-ups and major rebrands
This month, international beauty major L’Oréal announced its tie-up with luxury fashion house Prada. The long-term license agreement between the two businesses would see the development and launch of a luxury beauty line under the Prada brand.
In October, an investment consortium announced the acquisition of global major Nestlé Skin Health for €9.35bn and rebrand of the business as Galderma, establishing a dermatology global giant. Nestlé first entered into negotiations to sell off its Nestlé Skin Health business back in May.
In November, German cosmetics major Henkel announced it would acquire US premium professional hair care brand DevaCurl. The acquisition will take the company further into a fast-growing segment – premium curly hair care.
Earlier this year, in July, consumer product giant Colgate-Palmolive entered into an agreement to buy aesthetic medicine firm Laboratoires Filorga Cosmétiques. The move will see Colgate-Palmolive strengthen its position in skin care, growing in the premium space.
In the same month, Avon Products also partnered with tech specialist HCL Technologies for infrastructure development. The collaboration forms the next stage of Avon’s digital transformation strategy and goal to improve efficiencies across the business.
Strategic supplier shake-ups - naturals, biotech and beyond
Most recently in the supplier space, International Flavors & Fragrances announced its merger with DuPont Nutrition and Biosciences – a move set to create a monopoly in fragrances and shake-up global supplies for beauty and personal care. The merger remains subject to regulatory approval and is set to finalise at the end of Q1 2020.
Some important partnerships were also formed between major suppliers this month. Specialty chemicals major Clariant also teamed up with French firm Plant Advanced Technologies (PAT) this month, a move that will see the two companies co-develop new beauty ingredient technologies and seal Clariant as the exclusive distributor of PAT’s personal care and cosmetic offerings. Royal DSM also entered into an exclusive global alliance with French biochemical specialist Metex. The deal will see both companies deliver a cosmetic-grade 1.3 propenediol (PDO) ingredient, bio-sourced from non-GMO feedstocks.
In May, Givaudan announced its acquisition of vegan silk biopolymer specialist AMSilk. The acquisition, it said, would push forward the scale of its Active Beauty division and capabilities in unique functional ingredients. More recently, in November, Givaudan Active Beauty also acquired Italian botanical player Indena. The deal, set to close in the first quarter of 2020, will not only strengthen its capabilities in botanicals but also expand out its functional beauty business.
In May, French biotech player Solabia acquired microalgae firm Algatech in a nod to the growing level of potential for microalgae in beauty. The acquisition aims to bring a flurry of innovative algae-based cosmetic products to market in coming years.
And in September, Japanese chemical major DIC announced the acquisition of BASF’s global pigment business for €1.15bn. The multi-billion deal would advance the Japanese firm’s reach into functional pigments and cosmetics but also Europe.
In October, speciality chemicals major BASF announced a partnership with French microbe tech firm Biomillenia. The partnership aims to try and identify novel dermocosmetic active ingredients that promote a healthier skin microbiome.