I am grateful to Rachel Brown and Beauty Independent for the opportunity to contribute to their 2026 M&A Forecast article. My analysis suggests the coming year will be defined by three core themes: strategic realignment of corporates, geographic shifts, and convergence with new verticals.
First, portfolio rationalization among major conglomerates will supply the market. After years of aggressive acquisition, large groups are now refocusing. This strategic shift should lead to meaningful divestitures of non-core assets. Market rumors, such as Estée Lauder looking to sale Dr. Jart+ and two other brands, Coty exploring a sale of its mass division and LVMH considering options for Fenty Beauty, illustrate this trend. These potential deals will create a pipeline of sizable assets for buyers, accelerating transaction volume.
Second, Korean beauty has matured into a primary target for consolidation. It is no longer a niche trend but a mainstream global segment. Official trade data shows the U.S. is now the leading destination for Korean cosmetics exports, holding a 22.2% share valued at $1.4 billion in 2024. The exponential growth of brands like Medicube and Beauty of Joseon demonstrates deep consumer loyalty. For global strategics seeking authentic innovation, this category offers compelling targets.
Third, dealmaking will increasingly target the convergence of beauty, wellness, and technology. The market’s boundaries are expanding into adjacent services. We see this in the rise of medical aesthetics chains and integrated wellness platforms. Recent deals, such as Iris Ventures’ backing of Innerskin and the well-being joint venture between L’Oréal and Kering, signal a move to build ecosystems that capture the full consumer journey from product to professional treatment.
For emerging brands, this environment demands discipline. The “growth at all costs” narrative has lost its potency. Investor scrutiny now focuses on sustainable unit economics, a rationalized product portfolio anchored by hero SKUs with scientific validation, and a clear, executable path to profitability. Operational rigor is the new currency for attracting capital.