Beauty M&A activity picked up strongly in 2025, as did valuations that gained unicorn status again despite strong headwinds and market apprehension following an extremely quiet 2024.
U.S. tariffs, a weak dollar and geopolitical unrest were among the hurdles faced, but the pace of deals accelerated nonetheless. The run wound down 2025 with the biggest bang of them all: L’Oréal’s 4 billion euro deal for the Kering Beauty business, which was announced on Oct. 19 and is an industry game changer.
Related Articles
“The beginning of the year started with a lot of anticipation for activity, and then in some ways, it was pulled back a bit because of the tariffs and the macroeconomic headwinds,” said Marissa Lepor, managing director and head of beauty and personal care at The Sage Group.
“But the second half was pretty active from an M&A perspective, especially as there was a bit of a shakeout between the teams that could navigate the tariffs, still connect with customers and really had the margin to play around with,” she continued. “Ultimately, the macroeconomic shifts were kind of a test of brand and team, and the ones that were able to navigate it really shined even more.”
L’Oréal led the M&A charge, but many a strategic as well as other investors were acquisitive, homing in on all categories and driving up valuations to $1 billion.
The French beauty giant made a host of transactions across all segments. But the Kering deal was a game changer.
“This L’Oréal deal has completely changed the power play,” Nnenna Onuba, founder of 100 Allies and an M&A strategist, formerly of Rothschilds, told WWD Beauty Inc in early November. She voiced the sentiment of many.
“There is going to be downward pressure on all of the sector,” Onuba continued. “It’s going to flow to retailers, investors, founders — everyone’s going to feel the weight of this.”
The 4 billion euro strategic partnership between L’Oréal and Kering extends from prestige and niche fragrance, making L’Oréal the clear leader in the category, especially with the acquisition of The House of Creed, into luxury beauty and wellness.
Still, there was an acquisition involving the sector that dwarfed L’Oreal’s purchase of Kering Beauty. Kimberly-Clark Corp. revealed in November that it will acquire Kenvue Inc., owner of brands including Neutrogena, Aveeno, OGX and Tylenol, in a deal valued at $48.7 billion. That transaction is expected to close in the second half of 2026, subject to regulatory approvals and was devised to create a major global health and wellness leader.
As for L’Oréal’s other acquisitions, it revealed in early December that the group would double its stake in Galderma, the pure-play dermatology leader that’s among the largest in injectables, to 20 percent, highlighting the beauty giant’s increasing focus on the burgeoning aesthetics market. Financial terms of the deal transaction were not disclosed, but the 10 percent stake is valued at about 3.9 billion Swiss francs.
As part of their agreement, the French group and Swiss concern are to explore reinforcing their current scientific partnership.
L’Oréal’s other acquisitions included purchasing a majority stake in the premium skin care brand Medik8 — the price of which was not disclosed, though it reportedly came with a value of about 1 billion euros. The price indicated the first return to unicorn valuations in the beauty industry in 2025. L’Oréal now has the right to buy out the minority shareholders of Medik8.
Industry sources had also indicated that Color Wow, the hair care brand that L’Oréal in late June signed an agreement to acquire, had been looking for a $1 billion valuation. The acquisition of it strengthened L’Oréal’s position in the hair care market and styling category.
That brand was started 12 years ago by serial entrepreneur Gail Frederici and is best known for its hero product called Dream Coat Supernatural Spray. One bottle, at $28, is sold every 4.4 seconds, according to Color Wow.
The first big core beauty deal to make everyone think that this year could turn out much differently than 2024 came midyear, in May. That’s when E.l.f. Beauty reached an agreement to acquire Hailey Bieber’s beauty brand Rhode in a deal valuing it at $1 billion.
Subsequently, Rhode has launched in Sephora North America, representing the retailer’s biggest launch ever, according to E.l.f. Beauty chief executive officer Tarang Amin.
Unilever has also been active on the M&A front, despite a CEO switch on March 1. In April, the group acquired British sustainable deodorant brand Wild for an undisclosed sum and in June snapped up men’s personal care and grooming brand Dr. Squatch from private equity firm Summit Partners.
Unilever was a seller, as well, spinning off skin care brand Kate Somerville to Rare Beauty Brands. Founded by Los Angeles-based aesthetician Kate Somerville, the brand became known for its innovation and performance. Unilever acquired it in 2015, but in recent years the brand has struggled to maintain relevance in a crowded market.
Another big deal came in March, when after months of speculation Skims, Kim Kardashian’s shapewear and apparel company, acquired Skkn by Kim cosmetics from Kim Kardashian and Coty Inc. Coty had acquired 20 percent of KKW Beauty, for $200 million, in 2021. Subsequently, at the end of June, Skkn by Kim was discontinued. It is speculated that Kardashian’s beauty offering will be relaunched under Skims.
In March there was a deal for Carol’s Daughter. After a decade under its ownership, L’Oréal USA sold the hair care brand to an unnamed independent beauty entrepreneur. Carol’s Daughter founder Lisa Price was to take on the role as president and has an equity stake in the deal. Other terms were undisclosed.
There was a mega transaction for a hand sanitizer in August, when Church & Dwight bought the Touchland brand for up to $880 million.
A notable deal took place in the retail space. Ulta Beauty purchased Space NK from investment firm Manzanita Capital, as Ulta’s new CEO Kecia Steelman continued to make significant moves. Terms of the transaction were not disclosed, but press reports circulating in 2024 suggested Manzanita was seeking a deal valued between 300 million pounds and 400 million pounds.
Meanwhile, there are no signs of beauty M&A slowing, with much on the horizon for 2026.
“One of the most exciting things about the beauty category is that it’s incredibly dynamic,” said Alicia Sontag, cofounder and managing partner of Prelude Growth Partners, during WWD Beauty Inc’s The Catalysts event in New York in November. “Retailers are changing, you look at Amazon, TikTok — strategics are changing, we saw Kering go to L’Oréal. We saw Kenvue go to Kimberly-Clark. The winners will be the brands that have been built to last.”