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M&A insights: Speculation regarding the fate of Aesop and fierce competition in the AI space

Updated: Mar 7

1) Potential buyers of Aesop stake:

French group LVMH and L’Oréal, and Japanese group Shiseido are considering acquiring 100% of Aesop for $2bn. If these multinational beauty giants, specializing in fashion, skincare and cosmetics products, were to acquire a stake in Aesop, it would likely be part of a strategic move to expand their offerings in the high-end skincare and cosmetic markets. Negotiations are taking place three months after Natura & Co. hinted at a possible Aesop IPO in the US, and there is a possibility that no firm bids may come out of these negotiations.

2) Paramount Global merges Showtime into Paramount+:

The American multinational mass media, Paramount Global, is planning to integrate Showtime’s streaming service into its platform, Paramount+. The company has faced declining stock prices due to increased competition in the streaming industry post-Covid-19. The merger is expected to boost their streaming business by adding subscribers. The CEO, Chris McCarthy believes that by redirecting investment away from underperforming areas that account for less than 10% of their views, Paramount will be better positioned to compete with industry leaders like Netflix, Disney, and Warner Bros. Discovery.

3) PE fundraising down by $100bn in 2022:

Private equity fundraising tumbled by more than $100bn in 2022 due to an over-representation of private equity within Limited Partners’ portfolios. Although there was a drop from the 2,278 funds that raised $830bn in 2021, 2022 was still ranked as the third largest year for capital raised, closing with a total of 1,520 fund raising a total of $727.3bn. According to Church, co-founder of Rede Partners, funds focusing on healthcare and B2B software strategies will continue to see demand in 2023.

4) Google invests in AI start-up Anthropic:

The tech giant, Google, has invested $300mn in AI start-up Anthropic by taking a 10% stake in the company. By boosting Anthropic’s finances, Anthropic can co-develop AI computing systems while utilizing Google Cloud, which Anthropic has designated as its “preferred cloud provider”. Anthropic is seen as a potential rival to ChatGPT as it develops its own chatbot. Meanwhile, Chinese search giant Baidu Inc. announced plans to launch its own AI chatbot in Chinese markets, intensifying the competition in the AI space.

5) Issa brothers consider merger with EG Group in £13bn deal:

The Issa brothers, owners of Asda, are exploring a merger of the supermarket giant with their UK petrol forecourts business, EG Group in a £13bn deal. This merger would result in a total of 581 supermarkets, 700 petrol forecourt and 100 convenience stores. The brothers are considering the merger due to a £7 billion debt owed by EG Group in 2025 and rising interest rates. The combination would allow for cost cutting and debt reduction, such as by selling Asda products at petrol station forecourts. The proposed merger has drawn attention from the UK's Competition and Markets Authority and government, as they are concerned about the potential for petrol prices to increase amid a cost-of-living crisis.

6) KKR make non-binding offer to buy stake in Telecom Italia’s fixed line business:

KKR presented an offer that could help resolve the future of the debt laden company. KKR’s offer will give them a stake in a company that matches with the fixed line network management and infrastructure according to Telecom Italia. This spinoff is likely to take a majority of the behemoth’s 25.5bn debt

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