LOreal to buy Carita and Decleor from Shiseido

Shiseido Co. has announced the signature of an agreement with LOréal for the sale of its Carita and Decléor activities. The transaction will involve a combined share and asset transfer, and is the result of exclusive negotiations which started on 18 October 2013. It is expected to close in the near future, subject to regulatory approvals.

The move comes as Shiseido is undertaking rigorous group-wide efforts toward pursuing a strategy based on "selection and concentration," with the aim of making its strong fields stronger and its large fields larger, while generating higher profits from highly profitable fields. Accordingly, the company has conducted a thorough review of operations in order to ensure sustainable growth of business, including within the Professional Division. It was alongside this strategic development that the company received an offer from LOréal, involving the proposal for the sale of Carita and Decléor activities and engaged in exclusive negotiations.

Going forward, within the Professional Division, Shiseido plans on directing its focus on both Shiseido Professional, which is growing significantly in Japan and China, and JOICO, which is expanding in the US as well as in Europe, to make the most of its strength in the hair business area.

In terms of region, the division looks forward to accelerating business deployment in Asia, where the professional hair care market is growing rapidly. Carita and Decléor, which have deployed skincare businesses, among others, mainly in Europe, are the brands that have strengths in the business area different from those of hair and Asia on which the compay intends to focus on within its professional division. Accordingly, the company has determined that it will be the best choice for both themselves and the brands to sell to LOréal.

Concerning the transaction, the Shiseido said, "Carita and Decléor have contributed to strengthening the presence and the improvement of the prestige image of the Shiseido Group. We have determined to sell the brands while undertaking rigorous efforts toward pursuing a strategy based on selection and concentration and we believe that it will be the best choice for both our company and the brands. Herewith, for the fiscal year 2014 and beyond, we will further accelerate growth to become a global player representing Asia with its origins in Japan."

The effect of the completion of the transaction on the consolidated business results for the fiscal year ending 31 March are expected to be very minor. The effect of the transaction including the gain on sale will be posted on the consolidated business results for the fiscal year ending 31 March 2015.