M&;A, smaller, strategic operations in beauty

The M&A market in the beauty & personal care sector closed 2024 with a new record: 355 deals globally, up 40% from 2023. However, the average value per deal has drastically decreased by 60% in the last two years, from USD 400m in 2022 to USD 160m in 2024 and 2023. Large transactions have almost died out, accounting for only 3% of the total. "This is a sign of a structural transformation: fewer mega-deals, more targeted acquisitions on agile, high-traction brands," comments Marina Catino, partner at Kearney, which published its observatory on M&s in the beauty personal care sector.In 2025, however, operators remain optimistic: 80% expect growth in both volumes and valuations. Skincare and dermocosmetics lead the interest ranking (with an 8% increase in expected volumes), with a strong push towards highly scientifically effective products. Great attention is also being paid to beauty tech, artificial intelligence and the personalisation of treatments. "The most significant fact, however, is the change in the strategic logic of corporate buyers: the motivations behind acquisitions are evolving markedly," adds Catino. Growth acceleration and portfolio diversification are the dominant drivers, accounting for 42% of deals in 2024, compared to 30% in 2022. By contrast, deals related to vertical or production integration are declining.

In this scenario, the acquisition of new consumers emerges as the main reason for strategic buyers to pursue M&A transactions in 2025: entering new markets, speaking to new generations, opening new channels. At the same time, for private equity investors, the main driver in 2025 is the creation of operational value and the optimisation of costs, margins and organic growth, confirming that many funds are seeking to recover value on assets bought in the past at high valuations, which are now difficult to replicate in the market. "This increasing selectivity," says Catino, "reflects the maturity of the industry and a much more rigorous focus on aligning target and strategy. Sellers remain anchored to historical multiples, but buyers are more prudent, aware of risks and opportunities'. Geographically, 2024 marked a turning point: for the first time since 2020, Asia overtook North America as the second-largest target region for M&A volumes, with India (attracting large global investors such as L Catterton and Unilever Ventures) and South Korea (on the back of the K-beauty skincare phenomenon) leading the way thanks to dynamic trends and growing domestic demand. For 2025, India and North America are confirmed as the most promising areas in terms of expected increase in the number of deals, while Europe remains stable and China still shows signs of caution.

A look at the brands to be monitored for 2025 offers further insight into the geographic and strategic priorities of the industry. Names such as Augustinus Bader (European high-end skincare), Makeup by Mario and Rare Beauty (US make-up), Gisou and Olaplex (haircare) to Asian niche brands such as Born to Stand Out (Korea) emerge. "The list," Catino explains, "reflects a demand focused on high-growth brands with distinctive equity, positioned between premium and prestige and with strong digital penetration, often already tested but not yet consolidated. Italian subcontractors, undisputed protagonists of beauty production on a global scale, also operate within this new complexity. With solid financial structures and ambitions for growth, they are aiming at selective acquisitions that allow them to expand their presence in emerging markets (such as South-East Asia), rather than defensive or purely enlargement operations". And he concludes: 'In the beauty M&A of 2025, those who will win will not be those who do the most deals, but those who choose best, with vision, consistency and the ability to build real value, inside and outside the balance sheet'.