In 2024, the beauty industry anticipated a significant surge in mergers and acquisitions (M&A), yet the reality unfolded quite differently. Instead of a flurry of deals, major conglomerates chose to exercise caution, remaining on the sidelines even as a number of attractive brands initiated their sales processes.

This year saw notable brands like Kosas, Rare Beauty, and Makeup by Mario exploring potential sales, yet the interest from large buyers appeared lukewarm. The most significant deal came at the year’s start when Puig acquired the luxury skincare line Dr. Barbara Sturm, a move that diversified its portfolio, heavily focused on fragrances and cosmetics. This acquisition coincided with Puig’s successful initial public offering in July, signaling robust interest in some segments of the beauty market.

Despite the subdued M&A landscape, several brands did make the leap. Private equity firms seized opportunities to acquire promising companies. For instance, the popular skincare brand Summer Fridays found a new home with TSG Consumer Partners, while the affordable cosmetics brand Kiko Milano was acquired by L Catterton. Additionally, Olive + June, a rising star in nail care, was bought by Helen of Troy, the parent company of Hydroflask. This acquisition pattern indicates a strategic focus on growth and value in a potentially volatile market.

Market dynamics in 2024 presented a buyer’s landscape, where several brands sought new ownership while conglomerates remained selective. With numerous brands up for acquisition, larger companies such as L’Oréal and Estée Lauder faced a unique dilemma. Many already have extensive portfolios from aggressive acquisition strategies over the past decade and displayed no urgent need to expand further unless a brand demonstrated significant potential and market viability.

Companies that successfully navigated the acquisition process revealed crucial insights about where the industry sees future growth. Skincare continued to emerge as a key focus area, along with brands that offered robust value propositions. For instance, Kiko Milano appeals to consumers with its quality products at competitive price points, while Olive + June resonates with DIY enthusiasts looking to extend the interval between salon visits.

Looking ahead, 2025 presents an intriguing picture. With brands like Makeup by Mario reportedly exploring exits, the impending year may still hold promise for M&A activities, provided potential acquirers recognize value in these brands. However, the reality remains that many beauty lines today face a crowded market and fewer suitors willing to invest without clear evidence of market traction.

Several specific acquisitions stood out in 2024:
– Puig’s Purchase of Dr. Barbara Sturm: Enhancing its skincare portfolio, Puig’s acquisition of Dr. Barbara Sturm marked a strategic decision to balance its fragrance-heavy identity.
– Summer Fridays and TSG Consumer Partners: The influencer-driven brand aligned perfectly with TSG’s focus on high-growth beauty sectors, indicating the synergy between modern marketing and private equity’s interests.
– Helen of Troy and Olive + June: This acquisition points to a rising interest in do-it-yourself beauty solutions, as consumers increasingly seek quick and convenient beauty routines at home.
– L Catterton and Kiko Milano: As LVMH’s private equity arm, L Catterton’s investment underscores the potential in value-driven brands amid rising consumer cost consciousness.

In conclusion, while 2024 may not have been the blockbuster M&A year some anticipated, the strategic movements that did occur set the foundation for potential growth and reshaping within the beauty industry. As companies reassess their portfolios and market positions, the outcome remains uncertain but full of opportunities for brands that align with consumer demands and market innovations.