L’Oreal Acquires Majority of UK Skincare Brand Medik8

Global beauty behemoth L'Oreal S.A. today announced a definitive agreement to acquire a majority stake in Medik8, the acclaimed British professional skincare brand, from private equity firm Inflexion. L'Oreal's share price has moved down on the day, with a 0.72% decline following the path of the CAC 40.

Year to date, L'Oreal shares have outperformed the broader French index, gaining 11.93% as the CAC 40 has added 5.26% over the same period.

This strategic acquisition marks another significant step in L'Oreal's expansion within the lucrative and rapidly expanding premium and dermatological skincare sectors. Medik8, known for its science backed formulations, particularly its pioneering work with vitamin A (retinoid) technologies, is poised to bolster L'Oreal's already formidable Luxe division.

“This acquisition further strengthens L'Oreal's luxe portfolio, adding a premium science-backed skincare brand with a proven track record of success, with strong potential for global growth,” L'Oreal stated, underscoring the strategic fit. The move is seen as a direct effort to capture a larger share of the “fast-growing dermatological skincare market,”

The acquisition comes at a time when L'Oreal's luxury division, its second-largest segment which includes prestigious names like Lancome, Yves Saint Laurent, and the recently acquired Aesop, has experienced a moderation in growth. Last year, the division saw sales growth slow to 2.7%. While this figure still outpaced the beauty division of luxury rival LVMH, it was the lowest growth rate among L'Oreal’s segments, reflecting a broader market trend where higher inflation has seen some shoppers pivot towards less expensive alternatives.

The integration of Medik8, with its strong professional endorsement and dedicated consumer base, is anticipated to inject fresh dynamism and tap into a resilient consumer demand for high-performance skincare.

Under the terms of the deal, Inflexion, which has backed Medik8's significant growth trajectory, will retain a minority shareholding in the company. However, L'Oreal has secured rights to acquire these minority shares in full at a later stage, paving the way for complete ownership.

The expectation is that L'Oreal will leverage its extensive global distribution network, marketing prowess, and R&D capabilities to significantly scale Medik8, transforming the British success story into a global powerhouse.