L'Oréal acquires natural cosmetics retailer Body Shop

"I don't see it as selling out," she said. "L'Oréal has displayed visionary leadership in wanting to be an authentic advocate and supporter of our values." But criticism of the deal came yesterday over the linkup between Body Shop, known for products that aren't tested on animals, and L'Oréal, which has yet to ban animal testing.

The Globe and Mail
March 18, 2006

L'Oréal acquires natural cosmetics retailer Body Shop

Body Shop International PLC, the British retailer that promotes natural-based cosmetics, has agreed to be taken over by L'Oréal SA of France in a cash deal worth £652-million ($1.15-billion U.S.).

Body Shop will retain its separate identity and current management, the companies said yesterday.

"A partnership between our companies makes perfect sense," said L'Oréal chairman and chief executive officer Lindsay Owen-Jones. "Combining L'Oréal's expertise and knowledge of international markets with the Body Shop's distinct culture and values will benefit both companies."

He said the company does not plan to close stores or cut jobs.

Body Shop was founded 30 years ago in Brighton, England, by Anita and Gordon Roddick, and there are now more than 2,000 stores around the world.

The Roddicks stepped down from managing the company in 2002, but have remained as non-executive directors and stand to bank around £117-million from their 18-per-cent stake.

Anita Roddick, who will retain her current role as a consultant, said the company's values will not change.

"I don't see it as selling out," she said. "L'Oréal has displayed visionary leadership in wanting to be an authentic advocate and supporter of our values."

But criticism of the deal came yesterday over the linkup between Body Shop, known for products that aren't tested on animals, and L'Oréal, which has yet to ban animal testing.

"It's ironic that a company well known for its anti-animal testing stance should sell out to one that tests on animals and which has yet to show its commitment to any ethical issues at all," said Ruth Rosselson of Ethical Consumer magazine.

Anita Roddick said Body Shop is about more than just animal testing and that a benefit to joining with L'Oréal is that Body Shop will be able to teach L'Oréal about issues such as "community trade, which is the best poverty eradicator in the world."

Mr. Owen-Jones also said L'Oréal won't be able to stop animal testing overnight, but it does have the long-term plan of "joining Body Shop on the issue."

L'Oréal, which makes Maybelline mascara, Lancome skin cream and Armani and Ralph Lauren fragrances, is paying £3 a share for Body Shop, a premium of 34.2 per cent over the share price on Feb. 21, the day before takeover speculation appeared in the media.

BOS (LSE) rose 28 pence (49 cents U.S.) to £2.96. OR (Paris) fell 25 euro cents (30 cents U.S.) to €74.35. AP


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