The Body Shop agrees to £652m takeover by L'Oreal
LONDON - The Body Shop has agreed to £652m takeover by L'Oreal, which promised to leave the ethical cosmetics brand and its business intact and help it grow internationally.
L'Oreal's approach was endorsed by The Body Shop's co-founder Dame Anita Roddick, who will receive around £130m for the 18% stake she and her husband and co-founder Gordon Roddick own.
"For both Gordon and I, this is without doubt the best 30th anniversary gift The Body Shop could have received. L'Oreal has displayed visionary leadership in wanting to be an authentic advocate and supporter of our values.
"They understand what a maverick The Body Shop was in the business world and how we helped change the language of business, incorporating the action of social change, especially in human rights, animal welfare, the environment and community trade."
Roddick will remain in her current role as consultant to The Body Shop, becoming in addition a consultant to L'Oreal on community trade.
L'Oreal said it want to keep The Body Shop's existing management team and maintain strong relations with employees, franchisees, The Body Shop at Home consultants and suppliers. The chain has more than 2,000 stores in 53 countries after expanding abroad after intensified competition in the UK.
In contrast to the principles held to by The Body Shop, L'Oreal has been criticised for animal testing by animal rights charity Peta, although it responds that stopped animal testing for its entire range of cosmetics products in 1989 but it is compelled by European law to test some products on animals. It is also part-owned by Nestle, which was condemned by Oxfam for its business practices in Ethiopia.
Anita Singh of Peta said on learning of L'Oreal's interest in The Body Shop: "Big companies are learning that consumers care about compassionate cosmetics. We hope Body Shop convinces L'Oreal to adopt more ethical standards."
In addition, Roddick herself has been highly critical of L'Oreal's ethical practices in the past. A section of her website headed "Because You're Not Worth It" sees her rail against the global cosmetics company.
The move mirrors a recent trend for multinationals to snap up small, ethical brands, such as Cadbury Schweppes' takeover of Green & Black's, including the world's first Fairtrade chocolate bar, Maya Gold.
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