Shiseido Acquires Drunk Elephant
On October 7, 2019, the Shiseido Group announced that it would acquire clean skincare brand Drunk Elephant for $845 million, a valuation of 8.5 times sales. Did Shiseido pay too much or too little for this brand asset? How much was the Drunk Elephant brand worth and how could it be valued? Every acquisition had to be measured against the cost of developing and building a look-a-like brand internally. Would Drunk Elephant prove to be an integral part of Shiseido’s future success and what would it take to unlock its full brand value? What kinds of further investments would Shiseido need to make to realize the new brand’s potential? How would the brand fit into the company’s existing brand portfolio of 42 brands?
Keywords: marketing; marketing strategy; brands and branding; brand management; brand valuation; Brand equity; Brand Value; Mergers ＆ Acquisitions; Beauty and Cosmetics Industry; entrepreneurship; Startup; DTC; valuation; brand portfolio strategy; Marketing; Marketing Strategy; Brands and Branding; Mergers and Acquisitions; Valuation; Beauty and Cosmetics Industry; Consumer Products Industry; United States; Japan; Asia; North America;
Citation:
Avery, Jill. "Shiseido Acquires Drunk Elephant." Harvard Business School Teaching Note 520-121, June 2020. View Details