Shiseido To Buy Mineral Makeup Line

Japanese cosmetics giant Shiseido has inked an agreement with American mineral makeup line Bare Escentuals to acquire the latter for $1.7 billion, in an all-cash deal, with a second-step merger. The boards of both companies approved the deal.

Via a U.S. subsidiary, Shiseido will bid to buy all outstanding shares of Bare Escentuals common stock for $18.20 a share, a 40% premium over the average closing price during the three-month period through January 13. The deal is conditional on the tender of a majority of the outstanding shares of Bare Escentuals common stock on a fully diluted basis, the continued employment of CEO Leslie Blodgett, and other issues, such as regulatory approval. It is not conditional on financing. The second-step merger will see outstanding shares purchased for the aforementioned price. The mineral makeup line will operate as a separate unit of Shiseido and its brands will remain under the management of existing leaders.

Bank of America Merrill Lynch is financial adviser on the deal while Shearman & Sterling and Mori Hamada & Matsumoto are joint legal advisers to Shiseido. Goldman Sachs is financial adviser to Bare Escentuals, with Ropes & Gray serving as legal advisor.