China’s leading investment company Fosun International reported to the Tel Aviv Stock Exchange it agreed to buy a 15% stake in the Dead Sea cosmetics manufacturer Ahava from B. Gaon Holdings Ltd.
The 290 million shekel (US$76 million) deal was signed on Sunday. Other major shareholders in Ahava include the US Shamrock Fund, the Livnat family and Kibbutz Mitzpeh Shalem.
Ahava, which manufactures skin care products from Dead Sea minerals and mud in 30 countries around the world, has been the target of the anti-Israel Boycott, Divestment and Sanctions (BDS) movement due to the plant’s location along the Dead Sea at Kibbutz Mitzpeh Shalem, which lies over the 1949 Armistice lines. Fosun, which also owns resort operator Club Mé diterrané e SA, could give the Israeli skin care brand a boost by helping it sell more products in its resorts and across China.
Young Chinese with more disposable income are buying more skin care products. Retail sales of skin care products have grown by 60% from 2010 to 2015 and are forecast to grow another 46% from 2015 to 2020, according to Euromonitor International. Chinese consumers tastes have shifted toward niche skin care brands, often including those from South Korea, away from bigger, well-known Western brands.
The deal was signed last week at a special event at Jerusalem’s David Citadel Hotel, with many Israeli government officials in attendance. The purchase is just one example of increased Chinese investment in Israel.
Bosun’s CEO Liang Xinjun said, “We feel very confident about the market in Israel and continue to seek suitable investment opportunities in different areas in the country. We are glad to have succeeded in acquiring such a famous, strong and successful brand as Ahava under this mutually beneficial agreement. We will endeavor to extend the success of this brand to China and other countries.”