Commission approves acquisition of The Body Shop by L’Oréal

02/06/06 After examining the operation, the Commission concluded that the transaction would not result in higher prices for cosmetics to the detriment of European consumers.

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the UK company The Body Shop International plc by the French group L’Oréal SA. After examining the operation, the Commission concluded that the transaction would not result in higher prices for cosmetics to the detriment of European consumers or otherwise significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

The Body Shop is active world-wide in the marketing and distribution of cosmetics products through a network of owned and franchised single-brand “The Body Shop” stores. L’Oréal is active in the research & development, manufacturing, marketing, distribution and sale of cosmetics products on a world-wide scale. Its main brand include L’Oréal, Lancôme, Biotherm, Helena Rubinstein, Kerastase and Maybelline.

Through the proposed transaction, L’Oréal would add a complementary brand with a strong reputation for naturally-oriented cosmetics products to its wide-ranging product portfolio and acquire a network of dedicated stores.

The Commission’s examination showed that the horizontal overlaps between the activities of The Body Shop and L’Oréal were limited and that the combined entity would continue to face several strong competitors with significant market shares.

Furthermore, given the limited size of The Body Shop stores’ network, the concentration would not deprive cosmetics manufacturers from access to a significant distribution channel nor deny competing retailers access to L’Oréal cosmetics products.