Unilever acquires Carver Korea

Unilever acquired local skin care company Carver Korea in a deal worth 2.27 billion euros ($2.7 billion) - the biggest-ever acquisition in Korea’s beauty industry.

In the statement, released on Monday, the Dutch-British conglomerate announced that it had acquired the shares from Bain Capital Private Equity and Goldman Sachs.

This makes Unilever the largest stakeholder in Carver Korea with a 60 percent stake. Bain Capital and Goldman Sachs initially purchased the stake last year.

Established in 1999, Carver Korea is widely known to local beauty consumers for its skin care brand, AHC. The brand saw huge success in the last few years, especially through home shopping and its famous “Real Eye Cream for face” series. The product, marketed as an eye cream that can be applied to the entire face, was the best selling eye cream in Korea last year and spawned a number of replica products. The company currently owns 20 patents in beauty and skin care.

“AHC has been strongly gaining popularity thanks to its efficacious, innovative and premium products; and it therefore offers great opportunities for growth,” said Alan Jope, Unilever’s president for the personal care sector.

Last year alone, Carver Korea grew threefold in sales compared to the previous year to reach 429.5 billion won ($377.7 million). Operating profits shot up, growing almost fourfold, during the same period to 180.4 billion won. Unilever hopes the acquisition will help strengthen its stance in the regional market.

“It will significantly strengthen our position in North Asia, the largest skincare market in the world, and will complement our existing portfolio, enabling us to offer luxury skincare products at attainable price points,” added Jope.

Although it was not pinpointed in the statement, industry insiders and analysts say the decision may be a move to gain leverage in the Chinese market, where Unilever’s performance was relatively sluggish with sales dropping 20 percent during last year’s second half.

Thanks to geological proximity and the spread of Korean pop culture, Chinese consumers have been a heavy client base for Korean beauty and skin care companies. AHC sold over 1.15 million facial masks last year during China’s Black Friday sales. It ranked in the top 10 among skin care brands selling products on Alibaba’s e-commerce outlets Tmall and TaoBao. The company did not officially disclose figures but industry sources say that around 50 percent of Carver Korea’s revenue is thought to come from the Chinese market.

Using famous celebrities like Jun Ji-hyun, Kim Hye-soo and Kang So-ra as models was another factor said to have contributed to AHC’s success in China.

The news also comes at a time when Korean beauty companies are struggling in the Chinese market in the aftermath of the Thaad deployment, which prompted a nationwide boycott on Korean products. A spokesman for AHC, however, said that Thaad did not have a big impact on the brand’s sales.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]