Despite a flurry of beauty M&A activity in 2025 — a record 384 deals globally, to be specific — average deal value is on the decline.
Kearney’s newest report shows that while beauty deal volume grew 8 percent in 2025 versus the year prior, the median deal value declined to $22 million from $26 million.
The trend comes as midsize brands, defined by Kearney as those between $100 million and $1 billion, have struggled to sell, with buyers instead favoring smaller or mega brands. (A number of billion-plus-dollar deals made included L’Oréal’s acquisitions of both Kering Beauté and Medik8, and E.l.f. Beauty’s purchase of Rhode).
In 2025, small deals, or those below $100 million, made up 77 percent of activity. Medium deals declined to 17 percent, and large deals doubled versus the year prior to 6 percent.
While total beauty deal activity slowed by 11 percent during the first half of 2026, small transactions increased to 86 percent of disclosed deals during the period. Kearney reports that the growth of small deals “reflects appetite to experiment at low capital commitment while the mid- and large-cap tiers stay largely closed.”
As large beauty conglomerates continue to restructure and rebalance their portfolios, Kearney expects their capacity for new deals to be limited, though private equity is “filling the vacuum” with acquisitions and carve-outs.
“For brands seeking a buyer, growth needs to be backed by profitability and a clear fit with the buyer’s business,” Marie Droll, principal at Kearney, said in a statement.
According to the report, Europe continues to be the top market by share of beauty M&A, accounting for 47 percent of deals in 2025. North America saw two years of share decline in 2024 and 2025, but in the first half of 2026 has rebounded, making up 31 percent of deals.
Said Fabian Lux, partner at Kearney: “Our report suggests more businesses could come up for sale as restructuring progresses, with more opportunities as we head into 2027. Buyers using smaller acquisitions now to build integration and PE-like value creation capabilities will be prepared for the next cycle of increased M&A activity.”