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L’Oréal signed a contract on Tuesday to sell The Body Shop to the Brazilian cosmetics maker Natura Cosméticos as it seeks to grow internationally.

Earlier this month, the French beauty products group had surprised many by announcing it was in exclusive talks to sell the British high street stalwart to Natura after failing to boost sales.

“L’Oréal announces that the contract for the sale of The Body Shop to Natura was signed,” L’Oréal said in a statement on Tuesday. “The proposed sale is subject to clearance by antitrust authorities notably in Brazil and in the United States, and expected to close during 2017.” The deal gives the British chain with locations around the world an enterprise value of €1bn.

Natura was founded in São Paulo in 1969 by Luiz Seabra and is one of Brazil’s most valuable brands. The company has said that after integrating The Body Shop, founded in 1976 by entrepreneur Anita Roddick, the combined group would have a turnover of R$11.5bn (US$3.5bn), with 17,000 employees and 3,200 stores. 

The Body Shop has faced increasing competition from other brands offering similar products based on natural ingredients with no animal testing. Sourcing many of its materials from the Amazon rainforest Natura, which also owns the Aesop beauty brand, has been successful in delivering to Brazil’s giant middle-market, but is looking for further growth.

“The acquisition of The Body Shop is a decisive step in making Natura Group an international player in the cosmetics industry, following in the footsteps of our previous acquisition of Aesop in 2013,” said João Paulo Ferreira, Natura’s chief executive, during a conference call after the announcement was made on June 9.

“In a sense, Natura and The Body Shop are like twins. We have been walking parallel paths in the past, and today, those paths are converging. We both share a same vision of cosmetics, advocating the use of natural ingredients, seeking to use our business as a platform to raise environmental consciousness,” he added.

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