L'Oreal offers $840 mln for Chinese Magic Holdings

L'Oreal has offered to acquire Chinese skincare company Magic Holdings International for HK$6,538 million ($840 million).

Paris-based L'Oreal announced its move for the Hong Kong-listed maker of facial masks on Thursday and said that its HK$6.30-per-share offer is supported by Magic's board of directors.

According to L'Oreal, six key shareholders, representing 62.3 percent of the company's equity, are already committed to supporting L'Oreal's proposal, and the deal would be subject to approval from the Chinese Ministry of Commerce.

The deal is expected to be financed through L'Oreal's internal resources and a 650 million euro credit facility from BNP Paribas, the two companies said in a joint statement. On completion, Magic Holdings shares are expected to be withdrawn from the Hong Kong stock exchange.

L'Oreal, the products of which include Garnier shampoo and Yves Saint Laurent perfume, posted a 5.2 percent rise in quarterly sales last month, boosted by higher growth in newer markets such as the Asia-Pacific region. China is L'Oreal's third-largest market behind the United States and France.

As one of China’s leading manufacturers in the mask category, Magic’s turnover in 2012 was approximately €150 million, up some 29% over 2011.   Relying on Magic’s highly talented management and teams, L’Oréal intends to develop this Chinese brand by contributing its science based expertise, and using its advanced and applied research in its China Research & Innovation center and across the world.   
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