Mergers, Acquisitions and Takeovers Case Study

L’Oreal in 2006: The Body Shop Acquisition

OR

Abstract:

In 2005, the $18.89 billion L'Oreal group is the largest and the most successful cosmetics company in the world, with over 19 international brands. Whether it sells Italian elegance, New York chic or French beauty through its brands, L'Oreal has reached out to a wide range of customers across different income groups and cultures. Over the years L’Oreal has acquired many brands and successfully integrated them in its brand architecture, sometimes retaining their brand origins and at other times giving them a ‘makeover’. The case discusses L’Oreal’s brand architecture, its retail strategy, promotion strategy, corporate structure and competition. The Body Shop is known for selling natural products and supporting environmental and human-rights causes.

In March 2006, L’Oreal has acquired The Body Shop International a U.K. based retail cosmetic brand revered for its ethical values for $ 1.1 billion. The development has surprised many as on the surface there seemed to be little in common between L'Oreal, which cultivates an image of French chic, and The Body Shop known for selling natural products and supporting environmental and human-rights causes. Moreover, L'Oreal is a manufacturer of beauty products and not a retailer. The case discusses the strategic fit, the benefits and the ramifications of the acquisition and the future possibilities of the association between the two companies.

Pedagogical Objectives:

• The case discusses L’Oreal’s brand architecture, its retail strategy, promotion strategy, corporate structure and competition
• The case discusses the strategic fit, the benefits and the ramifications of the acquisition and the future possibilities of the association between the two companies.

Keywords : Mergers,Acquisitions,Alliances Case Study;L'oreal; The body shop; Lindsay Owen Jones; Anita Roddick; brand architecture; brand positioning; reposition strategy; retail strategy; strateguc brand fit; promotion strategy; corporate structure; social branding; international cosmetic industry; franchising; acquisition; environment and human rights cause

Contents : 
Introduction
L’Oreal’s Brand Architecture
L'Oreal’s retail strategy
L’Oreal’s Promotions Strategy
L’Oreal’s Corporate Structure
L’Oreal’s Competition
L’Oreal Brand architecture