By  on August 15, 2013

L’Oréal has struck an agreement with Magic Holdings International Ltd. in China to acquire all of the shares of the Chinese manufacturer of cosmetics facial masks.

The deal is worth an estimated $840 million at current exchange, under L’Oréal’s agreement to pay a proposed price of 6.30 Hong Kong dollars, or 81 cents, a share. Shares of Magic Holdings are traded in Hong Kong.

According to a joint announcement, L’Oréal has won the support of Magic’s board, with six directors, holding 62.3 percent of the equity, committed to the sale proposal.

However, the transaction is subject to government approval of the ministry of commerce.

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Magic Holdings specializes in marketing facial masks, which is one of the hottest growing categories in the Chinese beauty market. The company’s MG brand is one of the market’s sales leaders. The company’s sales turnover for 2012 was valued at 150 million euros, or $200.2 million at current exchange, an increase of 29 percent over 2011.

In relying on the expertise of Magic Holdings’ management and staff, L’Oréal said it plans to help the Chinese brand develop further with the aid of the French company’s industry leading scientific prowess and by sharing the results of research at L’Oréal’s Chinese Research & Innovation Center in Shanghai and from other labs spread across the world. In addition to the Shanghai facility, L’Oréal has two plants in Suzhou and Yichang, along with 3,500 employees in China. The company expects the Magic Holdings business to complement its assortment of brands from the Consumer Products Division already operating in China.

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