The Face Shop, budget cosmetic label of South Korea’s beauty care maker LG Household & Healthcare Ltd., will buy a full stake in China’s cosmetic company Avon Manufacturing (Guangzhou) Ltd. for 79.38 billion won ($70.8 million).
The payout would be in 49.3 billion won in cash and 30 billion won in cashable assets, the company announced in a disclosure on Wednesday.
Founded in 1994 in Guangzhou, Avon Manufacturing produces makeup, skin care, hair and body products. It has also secured a current good manufacturing practice (cGMP) certification.
“The Face Shop aims to expand its manufacturing base in China through the acquisition,” said LG Household. “The deal is expected to be completed by next month after receiving the Chinese government’s approval,” according to an official from the company.
The Face Shop led road shop brands that have spurred K-beauty boom, but like other peers that went under are challenged at home by online malls and health and beauty (H&B) stores. The company expects the acquisition of the Chinese firm to provide it with an opportunity to revive its business.
By Kim Ha-kyung and Choi Mira
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