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Shiseido Inks $845 Million Deal for Drunk Elephant

The Japanese beauty company's latest venture is indicative of its attempts to bolster its presence among younger shoppers.
Source: Drunk Elephant
By
  • Bloomberg

TOKYO, Japan — Shiseido Co. agreed to buy skincare brand Drunk Elephant for $845 million as the Japanese beauty company seeks to appeal to younger consumers in the US.

The deal for Drunk Elephant Holdings LLC won’t have a significant impact on full-year earnings, Shiseido said in a statement Tuesday. It will be financed with a combination of cash and credit, and is expected to close by the end of the year.

Shiseido is acquiring a brand beloved by hip millennial and Generation Z consumers for its non-toxic ingredients and Instagram-friendly packaging, as the Japanese company attempts to bolster its presence among younger shoppers.

The world’s largest cosmetics companies have been rapidly acquiring upstart brands in recent years as they search for the next big hit. Last year, Shiseido redesigned its eponymous makeup line to appeal to younger generations.

The Drunk Elephant deal will add to Shiseido’s “prestige” skincare portfolio, which has been a key source of growth for the company in recent years as consumers show a willingness to spend on higher-priced beauty products.

Drunk Elephant was founded in 2012 by Tiffany Masterson and is known for its products with non-toxic ingredients that make use of acids. The company is profitable and on track to have more than $100 million in sales in 2019, according to Shiseido.

By Lisa Du; editors: Rachel Chang and Jeff Sutherland.

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