L'Oreal Acquires Innovist: Khaitan & Co Advises on Majority Stake

• L'Oreal India Private Limited has acquired a majority stake in Onesto Labs Private Limited, known as Innovist.
• Innovist is a leading digital-first Indian personal care house of brands.
• The transaction involved an all-cash secondary purchase of shares from Innovist's promoter and existing shareholders.
• L'Oréal also secured the right to acquire the remaining minority stake from Innovist’s founding team.
• Khaitan & Co advised L'Oréal on the acquisition, handling legal due diligence, structuring, documentation, negotiation, and closing.

This detailed scope of work by Khaitan & Co illustrates the intricate legal processes involved in significant cross-border M&A in India, particularly in the dynamic personal care sector.

L'Oreal India Private Limited has completed a significant acquisition in the burgeoning Indian personal care market. The global beauty giant has secured a majority stake in Onesto Labs Private Limited, known by its brand Innovist. This strategic move sees L'Oreal acquiring Innovist, a prominent digital-first house of brands within India's personal care sector. The transaction was structured as an upfront purchase of shares, executed entirely in cash, from Innovist's existing shareholders and its promoter.

This initial acquisition of a majority interest also includes a forward-looking provision. L'Oréal has established a contractual right to eventually acquire the remaining minority stake still held by Innovist's founding team. This phased approach allows for a structured integration while ensuring L'Oréal's ultimate full control over the innovative Indian personal care entity. The deal underscores the increasing interest of international players in India's rapidly expanding direct-to-consumer beauty and wellness space.

The comprehensive legal advisory for L'Oréal throughout this acquisition was provided by Khaitan & Co. The firm's mandate encompassed the entire lifecycle of the transaction, from initial stages through to its successful closing. This involved conducting thorough legal due diligence on Onesto Labs Private Limited, a critical step to assess the target company's legal standing and potential liabilities. Khaitan & Co also played a pivotal role in structuring the deal, ensuring it aligned with L'Oréal's strategic objectives and regulatory requirements.

Furthermore, the legal team was responsible for the meticulous documentation and negotiation of all pertinent transaction agreements. Key among these were the share purchase agreement, which formalized the transfer of shares, and a shareholders' agreement, outlining the rights and obligations of the parties post-acquisition. The closing of the transaction was facilitated through an escrow mechanism, managing both the cash payment and the share transfer securely. This detailed scope of work by Khaitan & Co illustrates the intricate legal processes involved in significant cross-border M&A in India, particularly in the dynamic personal care sector.

The successful execution of the L'Oreal Onesto Labs acquisition highlights the specialized legal expertise required for such complex corporate transactions. The core transaction team from Khaitan & Co was led by Partner Surbhi Kejriwal, with significant contributions from Principal Associate Vedika Bhandari, Senior Associate Nikhil Singh, and Associate Sanjitha Ravi. Strategic insights were also provided by Senior Partner Rabindra Jhunjhunwala, underscoring the collaborative nature of high-value deal advisory.

Beyond the core M&A team, the deal necessitated input from various specialized legal departments. Direct tax considerations were handled by Executive Director Vinita Krishnan, Principal Associate Bharat Jain, and Associate Krishnal Shailesh Agrawal. Indirect tax aspects were managed by Partner Mayank Jain and Senior Associate Rajshree Lohia. Additionally, Partner Anshuman Sakle and Principal Associate Siddharth Pravin Bagul addressed competition and merger control law aspects, ensuring compliance with regulatory frameworks. This multi-faceted legal support is characteristic of major India personal care M&A deals, where comprehensive due diligence and structuring are paramount for successful integration and future growth.

This transaction illustrates the comprehensive legal due diligence, structuring, and documentation required for significant M&A deals in the Indian personal care sector, including tax and competition law considerations. Lawyers advising on similar cross-border acquisitions should note the detailed scope of work undertaken by the advising firms.

Source: Original reporting via legal industry news.