Should Henkel Buy Olaplex?

Core Viewpoint - The financial community is evaluating the potential acquisition of Olaplex by Henkel AG, following a Bloomberg report about Henkel's takeover proposal for the New York-based hair care brand [1]. Group 1: Olaplex's Market Performance - Olaplex's stock has experienced a decline of over 90 percent since its public listing in September 2021, attributed to market-share losses and weak organic growth [2]. - Following the speculation of a takeover, Olaplex's stock rose by 22.2 percent, closing at $1.66, with a market capitalization of $1.09 billion [2]. - As of Thursday noon ET, Olaplex's stock was trading up 0.3 percent [2]. Group 2: Acquisition Details - The potential deal between Henkel and Olaplex could materialize within weeks, although its completion is not guaranteed [3]. - Advent International is reported to be Olaplex's largest shareholder, holding approximately a 75 percent stake [3]. Group 3: Strategic Implications for Henkel - Henkel aims to expand its presence in the hair care sector, reducing its reliance on home care products and enhancing its consumer division, which has undergone restructuring over the past three years [4]. - The acquisition of Olaplex could allow Henkel to leverage its global distribution channels more effectively, as international sales currently account for about 50 percent of Olaplex's net sales [5]. Group 4: Market Sentiment and Risks - Bernstein analysts express caution regarding the acquisition, citing Olaplex's specific challenges and Henkel's execution issues as potential risks [6]. - The beauty industry is anticipated to see increased M&A activity in 2026, following a rise in deals during 2025 [6].