Japanese cosmetics major Shiseido in talks to sell budget brands to CVC for over $1.45b

Photo: Shiseido.

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.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.