Shiseido plans sale of consumer product lines for over $1.45 billion
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Japanese cosmetics firm Shiseido Co Ltd said on Friday it was in talks to sell its lower-priced skincare and shampoo lines to private equity firm CVC Capital Partners in a deal reported to be valued at over $1.45 billion.
Shiseido said it was in talks to sell its “personal care” business in the first half of the year to CVC but that no decision had been made.
The business includes its Tsubaki shampoo and Sea Breeze deodorant brands which are sold at drugstores and convenience stores throughout Asia.
The talks were first reported by Bloomberg News, which put the value of the deal at between 150 billion to 200 billion yen ($1.45 billion-$1.93 billion).
Shiseido said it was considering taking a stake in the business and remaining involved in its development.
The talks come as Shiseido has been eyeing possible asset sales to focus on premium cosmetics, including its namesake line and brands such as Cle de Peau and NARS sold at department store counters.
Global private equity firms such as CVC and Carlyle Group have recently been looking to expand in Japan, taking advantage of large Japanese companies coming under pressure to sell non-core assets and improve returns to shareholders.
CVC last year raised $4.5 billion for its fifth Asia Pacific fund.
Like other companies in the luxury sector, Shiseido was hit hard by the coronavirus as people shopped less and wore less make-up. A halt in tourism has been particularly painful as the company depended heavily on Chinese visitors.
The company said in November that it expects a net loss of 30 billion yen in 2020, worse than a previous forecast loss of 22 billion yen.
Shiseido shares rose 4% in morning trade on the Tokyo Stock Exchange. A CVC representative declined to comment.
Questions & Answers
Q.Which specific product lines is Shiseido planning to sell, and where are these products typically retailed?
Which specific product lines is Shiseido planning to sell, and where are these products typically retailed?
Shiseido is planning to sell its lower-priced skincare and shampoo lines, including Tsubaki shampoo and Sea Breeze deodorant. These products are sold at drugstores and convenience stores throughout Asia.
Q.What is Shiseido's strategic reason for selling these particular business assets?
What is Shiseido's strategic reason for selling these particular business assets?
Shiseido is looking to focus on its premium cosmetics segment, such as its namesake line and brands like Cle de Peau and NARS. These premium products are typically sold at department store counters.
Q.What is the reported value of the deal between Shiseido and CVC Capital Partners?
What is the reported value of the deal between Shiseido and CVC Capital Partners?
The reported value of the deal for Shiseido's personal care business is over $1.45 billion. Bloomberg News put the value between 150 billion to 200 billion yen, or $1.45 billion to $1.93 billion.