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Shiseido to Acquire Bare Escentuals for $1.7 Billion

Posted: January 15, 2010

According to reports by The Associated Press, Shiseido Co. is seeking to purchase San Francisco-based Bare Escentuals Inc. in a $1.7 billion deal. The acquisition, announced Jan. 15, 2010, is, according to the report, Shiseido's biggest purchase since its founding in 1872 as Japan's first Western-style pharmacy.

The Tokyo-based company will offer to buy all outstanding stock of Bare Escentuals for $18.20 a share, which represents a 43% premium over its closing price on the Nasdaq Thursday. The transaction was unanimously approved by both boards of directors.

Bare Escentuals, founded in 1994, will operate as a separate division of Shiseido under current chief executive Leslie Blodgett, who is credited with taking Bare Escentuals from a small, niche player to an industry leader and innovator. Partially through Blodgett's regular appearances on the QVC shopping network and infomercials, sales grew from approximately $8 million in 1999 to $350 million in 2006 and $556 million in 2008.

"This is an exciting day for all of us at Bare Escentuals, and I couldn't be more pleased to be joining forces with the team at Shiseido," Blodgett said in a statement. "Together with Shiseido, we look forward to bringing our mineral-based beauty products to even more women worldwide."

The AP reports that, for Shiseido, the acquisition represents a major step in its bid to expand abroad amid a shrinking home market. The company is Japan's largest beauty company with operations in more than 70 countries, but global business accounted for only 38% of the company's $7.5 billion in sales last fiscal year. Its presence in the U.S. remains limited, making up 8% of total revenue.