Renhe's buying and selling body shop is cost-effective but hard to crack

[chinapharma.com news] on June 1, the news that Renhe pharmaceutical, a Shenzhen A-share listed company, is about to acquire the body shop, a British retail brand of cosmetics and skin care, spread in all major media According to British media reports, Renhe Pharmaceutical Co., Ltd has been consulting or intends to participate in the bidding for body shop of L'Oreal, France However, it is still unclear how Renhe intends to buy (Renhe's a good buy of body shop, but it's hard to bite the bone source: Baidu picture) first, humanwell pharmaceutical spent $600 million to buy the world's second largest condom brand In the past two days, foreign media reported that Renhe pharmaceutical would spend a lot of money to buy the body, a subsidiary of L'Oreal According to shop, Chinese pharmaceutical companies are increasingly cross-border and spend more and more money on overseas M & A there is little suspense about humanwell's acquisition Will Renhe's acquisition succeed? Sources close to the auction process said the initial asking price of 1 billion euros was too optimistic, suggesting the value may be only 600 million pounds or less If calculated in RMB, the low price will be 5.2 billion yuan 1 Who is bodyshop? In the field of natural cosmetics, the body shop can be called a global benchmark It is the world's first global brand developed in the mode of cosmetics single brand stores In 1982, new branches mushroomed, opening an average of two per month Body shop went public in 1985 and became a sponsor of Greenpeace In 1990, one year after entering the United States, the market demand for the body shop products was increasing, and more and more new stores were opened In the short 14 years after its opening, the company's trade network has reached 39 countries In 1994, the body shop at home was founded in the UK, and entered Canada and Australia in 1995, 1997 and 2001 At that time, it had spread to 48 states in the United States and was growing in size After that, it continued to practice the concept of environmental business In 2001, its head office in watersmead, UK, switched to environmental energy At present, many stores have been converted to environmental protection energy, and other stores have followed suit However, due to the problems of animal experiments, the body shop has not been able to enter China, Brazil and other emerging cosmetics market countries In 2006, L'Oreal acquired the body shop for 653 million pounds to expand the natural cosmetics market By the end of 2016, the body shop had 3000 stores in 66 countries However, with more and more natural skin care brands in the market, the sales performance of the purchased body shop has been poor In recent years, it has become a brand with poor performance of L'Oreal Group The branches in Hong Kong and Saudi Arabia are even experiencing difficulties Not only did sales fall 5% year-on-year for the whole year last year, but the operating loss increased sharply to 22.2 million euros from 7.2 million euros in the previous year Therefore, some analysts believe that at present, the cosmetics and skin care retail competition is fierce, and the market environment is becoming more and more difficult Giving up the loss business is a good choice next to reversing the business It is understood that L'Oreal has disclosed earlier that it is planning to sell its body shop, with an estimated sales amount of 1 billion euros and a Preliminary Valuation of 1 billion euros, equivalent to about 850 million pounds However, analysis shows that this valuation is too optimistic, and the transaction price is expected to be only about 600 million pounds 2 The business scope of Renhe pharmaceutical is very wide The main business covers the production and sales of Chinese and Western medicine, API and health-related products, etc other business covers a wide range, including medicine planting, carton production and sales, computer software development, advertising agency, chemical industry, etc If it successfully completes the acquisition, it will promote it to expand the healthy beauty market at home and abroad It is also a sign that another Chinese enterprise will complete the global development through M & A At present, influenced by the policies of generic drug consistency evaluation, medical insurance fee control and two vote system, pharmaceutical enterprises are facing pressure on products and marketing Renhe Pharmaceutical Co., Ltd is no exception According to the first quarter financial report of Renhe Pharmaceutical Co., Ltd in 2017, the company achieved an operating revenue of 829 million yuan from January to March, a year-on-year decrease of 1.18%; the average operating revenue growth rate of traditional Chinese medicine industry is 7.87%; the net profit attributable to shareholders of listed companies is 79376500 yuan, a year-on-year decrease of 23.61%, and the average net profit growth rate of traditional Chinese medicine industry is - 1.41% With the decline of sales volume, it has become a common choice for large pharmaceutical enterprises to expand overseas or "borrow ships to go to sea" with precipitation funds It is a common "trick" for mainland enterprises to obtain the permission to enter the overseas market for their own products and the corresponding market income through equity merger and acquisition, and successfully enter the overseas market Therefore, it is possible for Renhe pharmaceutical industry to purchase body shop of beauty industry, layout overseas healthy beauty market and even drive the pharmaceutical market However, such a cost-effective business from the current bidding situation, it is not easy to succeed 3 Some people are slightly better than others in bidding for bodyshop In fact, in addition to Renhe pharmaceutical, many buyers are eager to try At present, private equity companies such as Apax partners LLP anbaishen group, advanced international corp and the Carlyle Group LP Carlyle Group have shown interest in body shop However, due to the high expectations of L'Oreal Group and the complex international franchise network of the body shop, these buyers may be deterred It is widely believed that the potential buyer of the body shop is the alliance of Emmanuel Osti, former general manager of the French beauty products group, and CVC capital partners, a private equity company Back in March, they offered £ 650 million for the body shop And sources close to the auction process said Renhe pharmaceutical suggested the value could be only 600 million pounds or less In other words, in terms of purchase price, Renhe pharmaceutical industry has lost In addition, Emmanuel Osti has more experience in the beauty industry According to the data, he has been well-known in the industry From 2000 to 2015, he served as the executive director and general manager of the company At the beginning of last term, the sales volume of the company was 30 million euros Under his promotion, Euclidean combines the traditional and modern technology of Provence, the birthplace of the brand, and develops into one of the most influential brands in the industry At present, its annual sales volume has exceeded 1 billion euros Two years ago, he left o'shudan In the case of Emmanuel Osti's successful operation of the body shop, CVC, a private equity company, has thrown an olive branch to the body shop since the hearsay of its sale recently flowed out, hoping to cooperate with it in bidding CVC was founded in 1981 Up to now, it has completed more than 300 investments worldwide, with total assets under management of more than US $52 billion Its main investment targets are Asian and European markets The company currently has more than 400 employees around the world and 24 offices in Europe, Asia and the Americas All in all, in this battle, Emmanuel Osti, the bid buyer, will be a tough opponent for Renhe pharmaceutical.