Beauty M&A Hits Record 384 Deals in 2025 as Values Slide

Beauty M&A set a record of 384 deals globally in 2025, yet the median deal value fell to $22 million from $26 million, according to Kearney's newest report. Volume grew 8 percent. Value went the other way.

The divergence defines the year. More deals closed for less money each, and the shift was structural rather than cyclical.

Why are midsize brands stuck?

Midsize brands — Kearney defines them as between $100 million and $1 billion — struggled to sell. Buyers favored smaller brands or mega assets instead. The billion-plus deals of 2025 included L'Oréal's acquisitions of Kering Beauté and Medik8, plus E.l.f. Beauty's purchase of Rhode.

The deal-size mix tells the story:

• Small deals, below $100 million: 77 percent of 2025 activity
• Medium deals: 17 percent, in decline
• Large deals: 6 percent, double the prior year

What happened in the first half of 2026?

Total beauty deal activity slowed by 11 percent. Small transactions rose to 86 percent of disclosed deals. 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."

That quote carries weight. It signals buyers want optionality without exposure. The mid-cap tier, the traditional proving ground for breakout brands, stayed largely shut — and Kearney does not say when it reopens.

Who is buying?

Large beauty conglomerates continue to restructure and rebalance their portfolios. Kearney expects their capacity for new deals to remain limited. Private equity is "filling the vacuum" with acquisitions and carve-outs, the report found.

The buyer pool has changed shape, in other words. Corporate strategists step back. Financial sponsors step in.

For sellers, the bar is higher than headline deal counts suggest. "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.

Note the condition: profitability, not growth alone. Brands that scaled on revenue without margins now face the hardest market segment to exit — the midsize tier nobody currently wants.

Where are the deals happening?

Europe remains the top market by share of beauty M&A, accounting for 47 percent of deals in 2025. North America saw its share decline in both 2024 and 2025. In the first half of 2026, it rebounded to 31 percent of deals.

Kearney does not break out deal values by region, so the regional shift speaks to volume, not where the money concentrated.

What comes next?

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."

Lux frames today's small deals as rehearsal. The conglomerates selling assets are the supply; the buyers practicing integration are the demand. Whether midsize brands find exits before 2027 depends on the one thing the report never promises: profitability that buyers will pay a premium for.