Executive Summary

• Many global beauty companies have chosen to focus on acquisitions as a key strategy to drive growth. As a result, we have seen a steady rise in merger and acquisition (M&A) activity since 2013. In 2016, there were 91 beauty industry deals announced globally, up 25% from 75 deals in 2013.
• Beauty companies have been hunting for growth via acquisitions in high-growth niches of the market such as independent cosmetics brands and sustainable brands. Many of the targets have recorded growth rates in the high double digits in recent years.
• Intense competition for market share among the top beauty companies is expected to continue to drive M&A activity.
• We see three particular high-growth areas as likely to attract more M&A attention: organic skincare brands, South Korean beauty brands and social media-endorsed independent cosmetics brands. These areas have gained traction in recent years and have potential to outperform the overall beauty market.