Cosmetics giant buys Bare Escentuals for $1.7 billion

Japanese cosmetics giant Shiseido has announced it will buy San Francisco-based cosmetics company Bare Escentuals for $1.7 billion.  The move, ShiseidoÔÇÖs biggest acquisition to date, is in line with its strategy to boost its presence in the global marketplace. Thirty-four-year-old Bare Escentuals, famous for its bareMinerals and Buxom cosmetic brands, will operate as a separate division of Shiseido and remain under its current leadership. The San Francisco based-company has enjoyed steady growth over the past few years, with net income up 11 percent in 2008 to $98 million and total sales growing nine percent, to $556.2 million. Currently, 85 percent of Bare EscentualsÔÇÖ revenue comes from US sales. The company sells its products in retail stores such as Sephora, as well as in its own boutiques and directly to consumers through outlets such as QVC. Shiseido, Japan's largest cosmetics company, has also enjoyed fast growth in recent years, helped by booming demand for beauty products in China and other Asian markets. With operations in more than 70 countries, Shiseido is keen to expand its reach and plans to boost overseas sales to 50 percent of its overall revenue by 2017. Acquiring Bare Escentuals will help it expand its brand into the popular mineral-based product arena and widen its customer base. Bare Escentuals now stands to benefit from Shiseido's distribution channels in Japan and Asia, and in particular, its strong foothold in the Chinese marketplace. Commenting on the deal, Leslie Blodgett, CEO of Bare Escentuals, said: "This is an exciting day for all of us at Bare Escentuals and I couldn't be more pleased to be joining forces with the team at Shiseido. ÔÇ£First and foremost, I would like to thank our talented employees, our channel partners, and our loyal customers who have helped build Bare Escentuals from a small niche brand into one of the world's leading prestige cosmetics companies. ÔÇ£Together with Shiseido, we look forward to bringing our mineral-based beauty products to even more women worldwide." Shinzo Maeda, president and CEO of Shiseido added: "This acquisition further enables Shiseido to move towards our goal of becoming a global player representing Asia with its origins in Japan. ÔÇ£We have known and admired Bare Escentuals' excellent team and their achievements for a long time, and look forward to their contribution to our combined group. ÔÇ£The operational fit and future growth prospects make this an excellent transaction for our customers, employees and shareholders." The deal was unanimously approved by the shareholders of both companies. *┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á *