Blackstone Enters Exclusive Talks for Fancl Asia Unit

(Bloomberg) -- Blackstone Group Inc. is in exclusive talks to acquire Japanese skincare brand Fancl's Asia business outside its home country, people with knowledge of the matter said.

CMC Holdings Ltd. is working with adviser Morgan Stanley and is seeking more than $600 million for the business, Bloomberg News has reported. The Hong Kong-based company aims to conclude a deal in the first quarter.

Addressing the problem of parallel imports is among crucial factors for a deal to proceed, one of the people said. The term refers to discounted Fancl Japan products that end up being sold in geographies covered under the Fancl Asia license.

Deliberations are ongoing, and the seller could decide to engage other potential suitors if the exclusive talks fall apart, the people said, asking not to be identified as the information is private. An external representative for CMC declined to comment. A representative for Blackstone declined to comment.

Fancl's skincare products and nutritional supplements are marketed as being free from preservatives and other chemicals. The Japanese firm was founded in 1981, according to its website.

CMC Holdings, owned by Hong Kong entrepreneur Christopher Chan and his wife, has been Fancl's exclusive distributor for Asia outside Japan since 1996, Fancl Corp. filings show. CMC operates over 240 Fancl stores across Asia outside Japan, including more than 190 in China. It employs about 1,300 people and had annual revenue of more than $250 million last year.

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