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From L’Oreal to LVMH, global beauty giants in race to acquire Korea’s Able C&C

Shortlist of bidders for W100b deal to be announced in coming weeks

March 24, 2023 - 17:31 By Lee Yoon-seo

A Missha outlet in Seoul (Able C&C)

Competition is heating up to acquire a controlling stake in Able C&C, the operator of a slew of Korean budget cosmetics brands, with global beauty giants such as L’Oreal and LVMH reportedly joining the race.

Five to six strategic investors recently submitted their letters of intent to purchase 59.2 percent of shares in Able C&C, currently owned by IMM Private Equity, according to industry sources on Friday.

IMM became the largest shareholder of Able C&C, best known for its Missha brand, by acquiring stakes worth 40 billion won ($31 million) back in 2017. Now the company is seeking an exit after six years. The deal, including the operational rights, is estimated to be about 100 billion won.

LVMH P&C, a cosmetics and perfume subsidiary of French luxury giant LVMH Group, is reportedly one of the participants in the preliminary bidding. LVMH P&C manages a global portfolio of makeup brands, including Make Up Forever, Givenchy and Sephora, the retail chain.

Other global beauty companies such as L’Oreal and the Estee Lauder Companies also reportedly joined the bid. Back in 2018, L’Oreal acquired Korean makeup and fashion company Nanda for about 600 billion won, pinning high hopes on its makeup brand 3CE.

“Many of the bidders are foreign entities. Aside from that, we cannot disclose any details of the bidders,” a public relations official for IMM told The Korea Herald.

IMM plans to release the shortlist of bidders in the coming weeks, with the final bidding set to be held in May.

Sources say investors are paying keen attention to Able C&C’s growth potential, especially its upbeat growth in overseas markets in recent years when its bigger rivals suffered from pandemic disruptions. The company posted 74 percent and 15.5 percent sales growth in the US and Japan, the two biggest markets, in 2020-2022.

Largely buoyed by the sales growth abroad, the company swung to the black last year, reporting 20 billion won in earnings, before interest taxes and depreciation.

The robust growth also boosted its stocks, with prices soaring some 24 percent over the last six months.

In an interview with The Korea Herald earlier this month, Able C&C CEO Kim Eugene shared her views about Korea’s “fast beauty” industry.

"South Korea has a unique cosmetics ecosystem, as opposed to France and the United States -- the original powerhouses of the global cosmetics industry," she said.

"Korea has long produced its cosmetics products with OEM (original equipment manufacturing) and ODM (original design manufacturing) processes, which allowed for fast production of diverse range of makeup products.”

She also showed confidence in the company’s growth potential.

"The overseas market is a completely open market. With our endless growth potential in the overseas market, and there still being markets that have not been actively targeted, like Southeast Asia, we will aim for aggressive expansion, based on our greatly improved profitability," she added.