With its deal to acquire Japan’s Ci:z, Johnson & Johnson joins other global health and beauty sector giants buying up Asian cosmetics firms.
It’s about the quick product pipeline and proven online marketing programmes. The recent spate of deals in the health and beauty sector between multinationals from the U.S. and Europe and cosmetics firms in Asia is growing. Acquiring Asian brands is the best inroad for expanding in the booming region, which includes the $53.5 billion Chinese market, since the target firms come complete with regional brand recognition as well as smart, techy marketing and fast turnaround times for new products.
In May, France’s L’Oreal acquired Korean cosmetics and fashion company Nanda a/k/a Stylenanda. Best known for the make-up brand 3CE, which accounts for 70% of its business, Nanda operates across Asia, and has a millennial-friendly multichannel distribution model. Last year British-Dutch Unilever bought Carver Korea, the fastest-growing skincare business in South Korea and owner of the popular AHC brand. Paris-based luxury goods conglomerate LVMH and Estée Lauder, an American maker of make-up and skincare products, have also invested in Korean cosmetics firms.
Johnson & Johnson is the latest to do so, announcing on October 23 that it will buy all shares of Ci:z that it does not already own for 230 billion yen ($2.05 billion) in cash. The healthcare conglomerate is currently Ci:z’s second-largest shareholder, owning 19.9% through an affiliate since 2016. Ci:z’s biggest shareholder is CIC Corp, its founder’s ownership vehicle, which has a 27.9% interest, according to data from Refinitiv.
The acquisition will give Johnson & Johnson ownership of popular brands such as Dr.Ci:Labo, Labo Labo and Genomer, and help strengthen its international innovation pipeline. The American firm is especially keen to leverage Ci:z’s large consumer database. “This transaction will maximise value creation...by bringing in an agile innovation model and rapidly accelerating sales through our global commercialization expertise,” said Jorge Mesquita, Executive Vice President and Worldwide Chairman of Consumer Companies at Johnson & Johnson.
Johnson & Johnson is one of the world’s biggest and most diversified healthcare conglomerates, making medical devices and pharmaceuticals as well as consumer products. However, it has lately been selling businesses such as its diabetes care devices to focus on better-performing units and product development, Reuters reports.