Latham, Davis Polk advise on L’Oréal’s $2.5bn acquisition of luxury beauty brand Aēsop

Legal team led by top GC Alexandre Menais oversees brand's largest-ever M&A deal

L'Oreal adds Aēsop to its roster of luxury brands Shutterstock

Latham & Watkins and Davis Polk & Wardwell are advising on French skincare giant L’Oréal’s proposed $2.5bn acquisition of Australian luxury cosmetics brand Aēsop from Brazilian parent Natura & Co.

Latham is advising L’Oréal on the deal, while Davis Polk is providing counsel to Natura. The L’Oréal in-house team was led by group general counsel Alexandre Menais.

Aēsop, which was originally founded in Melbourne in 1987, has around 400 points of sale across the Americas, Europe, Australia, New Zealand and Asia. L’Oréal hopes to push the brand further into China after Aēsop opened its first Chinese store last year. The transaction is L’Oréal’s largest on record, eclipsing its $1.7bn purchase of YSL Beauté in 2008, according to Dealogic.

The deal caps months of negotiations as other companies, including private equity firm Permira and Chinese investment firm Primavera Capital, also showed interest in the Australian brand, which is known for its exfoliating hand wash, scented body lotions and incense kits. Natura – which also owns brands including The Body Shop and Avon – originally purchased a 65% stake in Aēsop in 2012 before taking full ownership in 2016.

The sale to L'Oréal is expected to be completed later this year.

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Cyril Chapuy, president of L’Oréal Luxe, said: “Aēsop is a true complementary brand to our portfolio, and its signature positioning will be a key asset for our future development. [It is] a brand that has been traditionally centered around body care, and has more recently expanded into skin care and fragrances, which anchors it to the luxury beauty market. Quite simply, Aēsop is a diamond of holistic beauty that will make our Luxe division even stronger.”

Menais has only been in charge of L’Oréal's legal team since September last year, when he joined from French tech giant Atos, where he was executive vice president with a wide-ranging brief that included responsibility for group M&A and corporate development. One of France's best-known GCs he also sits on the board of the Autorité de la Concurrence, France's national competition regulator, a role he has held since 2019.

He was assisted on the deal by Arnaud de Rochebrune, legal director for M&A and licenses; and Sabine Vermelle, associate general counsel for M&A.

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The Latham team was led from Paris by corporate partner Pierre-Louis Cléro, with counsel Raphaël Darmon and associates Julia Lefevre and Yasmine Houichi. Advice was also provided on corporate matters by London partner Neil Campbell and associate Harriet Stephenson; on antitrust matters by partner Mathilde Saltiel with associate Julien Morize; on commercial contracts matters by partner Jean-Luc Juhan with associate Daniel Martel; on tax matters by partner Olivia Rauch-Ravisé with associate Alexis Caminel; and on employment matters by partner Matthias Rubner with associate Léo Theillac.

Davis Polk’s New York-based partner Daniel Brass led the team alongside London counsel William Tong. London counsel Dominic Foulkes also provided tax advice, while intellectual property advice was provided by New York partner Frank J. Azzopardi. Antitrust and regulatory advice was provided in New York by partner Ronan P. Harty and counsel Nathan Kiratzis, as well as London counsel Matthew Yeowart.

L’Oréal has 36 brands in its total portfolio. Its Luxe division, which in 2021 became the French company's highest-earning sector, includes well-known brands such as Armani, Yves Saint Laurent, Helena Rubinstein, Kiehl’s, Mugler and Lancôme. The division brought in €12.43bn compared to the €12.23bn ($13.4bn) generated by L’Oréal’s consumer goods division, which contains brands such as Garnier and Maybelline.

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