L'Oreal targets Chinese skincare market with £540m acquisition

Paris-based beauty company L’Oreal has offered to buy Chinese facial mask maker Magic Holdings International for HK$6.54bn (£540m).

L’Oreal is hoping its HK$6.30 per share offer will allow it to take advantage the Chinese company’s leading market share of the fastest growing sector in China’s $15bn skincare market. The facial mask market is projected to grow by more than 35 per cent in the next two years – compared to 27 per cent growth in the skincare market overall.

The offer represents a 25 per cent premium on Magic’s closing price on 12 August when trading was suspended to prevent speculation. L’Oreal expects to finance the deal through internal resources and a €650m credit facility from BNP Paribas.

Six key shareholders representing 62.3 per cent of the company’s equity are said to be committed to L’Oreal’s proposal already. Magic shares jumped 19 per cent to an all-time high of HK$6.10.

Source: Yahoo