Shiseido makes $845 Million Deal for Hot Skincare Brand Drunk Elephant

Shiseido Co. has agreed to buy the hot skincare brand Drunk Elephant for $845 million as the Japanese beauty corporation is seeking to appeal to the younger consumers in the U.S. market.

The deal for Drunk Elephant Holdings LLC won’t be having a very significant impact on the full-year earnings, Shiseido has said in a statement on Tuesday, 8th October 2019. It will be fully financed with a combination of cash and credit and is expected to close by the end of the year.

Shiseido is acquiring a brand that is loved by the hippy millennial generations and the Generation Z consumers for its nontoxic ingredients and cool Instagram-friendly packaging, as the Japanese company attempts to tremendously increase its presence among the young teen shoppers.

Some of the world’s largest cosmetics companies have been rapidly acquiring upstart brands in recent years as they keep searching for the next big hit. In the previous year, Shiseido had redesigned its eponymous makeup line to appeal to the younger generations.

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

Drunk Elephant was founded in the year 2012 by Tiffany Masterson and is popularly known for its skincare products with nontoxic ingredients that make use of acids. The company has been profitable and on track to have more than $100 million in sales in the year 2019, as per Shiseido. This female-founded beauty products brand has become one of the fast-growing prestige skin-care companies in history now.