L'Oreal enters 'exclusive' talks to sell The Body Shop
L'Oreal has entered into "exclusive" talks to sell The Body Shop to Brazilian cosmetics manufacturer Natura Cosmeticos in a deal which could be worth 1 billion euro (£880 million).
The French cosmetics giant said on Friday that it had received a "firm" offer from Natura to acquire its Body Shop business and that the proposed transaction valued the iconic British beauty firm at an enterprise value of 1.0 billion euro.
L'Oreal put The Body Shop on the sale block in February, more than 10 years after snapping up the ethical skincare brand.
At the time, the company had said it was "exploring all strategic options" regarding its ownership of the firm founded by Dame Anita Roddick.
L'Oreal chairman and chief executive, Jean-Paul Agon said: "I am very pleased to announce Natura as the potential new "home" for The Body Shop."
"It is the best new owner we could imagine to nurture the brand DNA around naturality and ethics."
Jeremy Schwartz, chairman and chief executive of The Body Shop, added that the ethical values and expertise of Natura made it "the perfect new owner" of the chain, and said he was confident the move would help to rejuvenate the brand and drive future expansion.
Natura fought off a number of other bidders for The Body Group, including private equity group CVC and China's Fosun.
The sale comes after The Body Shop has suffered sliding sales, with lacklustre performance in Saudi Arabia and Hong Kong continuing to dog the firm.
Sales at the brand sank 5% to 920.8 million euro (£784.2 million) in 2016, down from 967.2 million euro (£823.7 million) in 2015.
But L'Oreal said in February that The Body Shop's "momentum was good" in Europe - especially in the UK - and across Latin America thanks to a new operation in Chile.
Dame Anita and her husband banked around £117 million from their 18% stake in the business when they backed the board's decision to push through a £652.3 million sale to L'Oreal in March 2006.
The Roddicks started The Body Shop in 1976 to help support their two young daughters, Justine and Samantha.
The company has 3,000 stores in 66 countries, employing around 22,000 people.