CVC fund close to a deal with Shiseido cosmetics
CVC fund close to a deal with Shiseido cosmetics
  Institutional Investors  |  International  |  Retail

CVC fund close to a deal with Shiseido cosmetics

Shiseido Co. is in advanced talks to sell its shampoo and affordable skincare business to CVC Capital Partners for 150 billion to 200 billion yen ($1.45 billion-$1.9 billion), as the Japanese cosmetics maker shifts its focus to premium beauty products, people with knowledge of the matter said.
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RE+D magazine
22.01.2021
According to Bloomberg, the Japanese company will sell part of its activities to the investment fund for $ 1.45 billion to $ 1.9 billion.

According to Bloomberg, the board of Shiseido is preparing to vote on the divestment soon, said the people, who asked not to be identified because the information isn’t public. The operations targeted for sale includes the company’s Tsubaki hair-care products and is mainly active in Japan, China and other parts of Asia.

The shares of Shiseido jumped as much as 6.5% in Tokyo on Friday, the biggest intraday climb since November. The company confirmed it was in discussions with CVC Capital to sell the unit, and that “no formal decisions have been made as of yet.” An external representative for CVC declined to comment.

Shiseido, founded more than 140 years ago as a pharmacy in Tokyo’s Ginza district, has been revamping its portfolio as the coronavirus outbreak has changed up cosmetic and personal care routines, dealing a blow to beauty companies. The lifestyle and personal care business represented about a 10th of Shiseido’s revenue in 2019, with annual sales of about 100 billion yen.
The potential deal includes some of Shiseido’s domestic and overseas operations, the people said. Negotiations are ongoing and could still be delayed or even fall apart, the people said.

Japanese companies have started looking closely at the domestic market and the health of their balance sheets as the pandemic put a stop to international travel. That means more companies are offloading non-core assets as part of their strategic review. Hitachi Ltd. in December agreed to sell a partial stake in its overseas home appliance business.

Shiseido has been seeking to exit non-core businesses by the end of 2021 as part of a revamp as well. Shiseido Chief Executive Officer Masahiko Uotani has said in the past year that asset sales may be necessary as the company prioritizes cash.