On July 21, Global New Material International held a special general meeting of shareholders, where the resolution to acquire the global Surface Solutions business of Germany’s Merck Group (hereinafter referred to as Merck Germany) for 665 million euros was unanimously approved. The transaction is expected to close by the end of July this year.
This also means that the largest acquisition of cosmetic raw material assets by a Chinese company is nearing completion.
56 Billion Yuan Deal Accelerates Global Expansion
Public information shows that Global New Material International is a manufacturer specializing in surface performance materials and pearlescent materials. Its predecessor, Guangxi Chesir Pearl Effect Material Co., Ltd., was established in 2011. Following a series of corporate reforms and developments, Global New Material International became the largest domestic producer of pearlescent pigments in China as early as 2019 and was officially listed on the Hong Kong Stock Exchange on July 16, 2021.
As early as June 2023, industry rumors emerged that “Global New Material International would acquire Merck Group’s global Surface Solutions business for 1 billion euros.” In July last year, the company officially announced that it had signed an agreement with Germany’s Merck Group to acquire its global Surface Solutions business. However, the official acquisition price was not the previously rumored 1 billion euros, but €665 million. At the time, Global New Material International stated, “The acquisition is expected to be completed in 2025.”
It wasn’t until yesterday that Global New Material International released its latest announcement, stating that the resolution to acquire Merck’s global Surface Solutions business was passed with 100% approval. The company said the transaction is expected to close by the end of this month. In other words, the acquisition is now nearing completion.
According to the announcement, the assets involved in the transaction include seven Merck subsidiaries in Germany, Japan, and the United States. The business spans 18 countries and primarily serves the surface solutions needs of coatings, cosmetics, and industrial applications. Merck’s global Surface Solutions business recorded revenues of €433 million, €405 million, and €402 million in 2022, 2023, and 2024 respectively. Of these, cosmetic product revenues were €157 million, €157 million, and €148 million.
Undoubtedly, this acquisition marks a major move for Global New Material International.
According to the company’s financial report, its revenue in 2024 was RMB 1.649 billion. This means the revenue scale of the acquired business is almost twice that of Global New Material International. Judging from the nearly RMB 5.6 billion acquisition price, the company is effectively using over three years of revenue to fund the deal.
It is also worth noting that this deal represents the largest-ever acquisition in China’s cosmetic raw materials sector.
So why is Global New Material International making such a bold move to acquire Merck’s global Surface Solutions business? At the shareholders’ meeting, Chairman Su Ertian stated, “Currently, the group’s market focus is mainly in China and South Korea. This transaction will enable the company to gain access to Merck’s sales network, customer base, and global brand influence across major countries in Europe, America, and Asia.”
According to the company, Global New Material International aims to leverage Merck’s mature cross-border e-commerce channels and localized service systems to achieve more efficient international client outreach, optimize its global supply chain, and accelerate its global expansion strategy.
Extending into High-End Cosmetic Solutions
Public information shows that Germany’s Merck was founded as early as 1668 and has a history of more than 350 years. Today, Merck is a global multinational group with three major business segments: Life Science, Healthcare, and Electronics. The group also operates as a well-known raw material supplier in the cosmetics sector, having worked with both Chinese and international beauty brands such as L’Oréal, Estée Lauder, Procter & Gamble, Unilever, and Pechoin.
It is understood that the Surface Solutions business involved in this acquisition falls under Merck’s Electronics segment. This unit focuses on providing surface solutions for coatings, cosmetics, and industrial applications, holding a strong position in the high-quality pearlescent pigment market and exerting notable influence in both the global automotive and cosmetics markets. Public data shows that Merck has a deep technological foundation in the pearlescent materials sector, with hundreds of patents in this field.
According to Merck’s official website, the company offers more than 200 cosmetic-related products, including pearlescent pigments, cosmetic active ingredients, and functional fillers. Additionally, Merck boasts the largest portfolio of cosmetic pigments based on substrate and coating technologies. Its active ingredient lines cover multiple functions such as moisturizing, whitening, and anti-aging. Its sun care portfolio includes inorganic, organic, and encapsulated UV filters.
It’s worth noting that pearlescent pigments are also the core business of Global New Material International. These pigments, known for their high color saturation, are widely used in makeup products such as eyeshadow, lipstick, foundation, and eyeliner. The company’s pearlescent pigment portfolio includes products based on natural mica, synthetic mica, glass flakes, and silica, and it also produces synthetic mica powder. Its products are mainly applied in automotive coatings, cosmetics, industrial coatings, plastics, and textiles.
Global New Material International markets its products under the brand “Chesir Pearl” and serves over 30 countries and regions across China, other parts of Asia (excluding China), Europe, Africa, and South America.
In recent years, the company has experienced steady revenue growth. Financial reports show that from 2020 to 2024, its annual revenues were RMB 569 million, RMB 667 million, RMB 917 million, RMB 1.064 billion, and RMB 1.649 billion, respectively.
As mentioned above, in addition to pearlescent pigments, the target business under Merck also includes cosmetic active ingredients, as well as certain industrial functional products and raw materials.
Therefore, how Global New Material International will effectively integrate Merck’s Surface Solutions business after the acquisition has become a key point of interest. On this, the company’s management stated: “Merck’s Surface Solutions business will begin using Global New Material International’s synthetic mica to gradually replace the natural mica Merck has traditionally relied on. Additionally, we will further enrich our product portfolio by integrating Merck’s capabilities in cosmetic actives and R&D, thereby extending into a high-end cosmetic solutions system.”
It’s clear that this acquisition is closely tied to the cosmetics industry. It will not only further solidify Global New Material International’s leadership in the pearlescent materials space but also support the company in expanding its R&D, production capabilities, and market share in cosmetic ingredients.
M&A Boom Hits Beauty Supply Chain
Notably, alongside Global New Material International’s acquisition of Merck’s Surface Solutions business reaching a new milestone, July 21 also saw global private equity giant KKR strike a deal with TPG to acquire 100% of Korean cosmetics packaging company Samhwa Co. for 800 billion won.
Just last month, on June 27, Givaudan also announced via its official website that it is acquiring a majority stake in Brazilian supplier Vollmens Fragrance Ltda.
According to incomplete statistics from CHAILEEDO, over the past three years, at least 12 acquisitions have occurred in the global upstream beauty supply chain. These deals have involved raw material suppliers, fragrance and flavor giants, ingredient distributors, contract manufacturers, and packaging companies. Among the disclosed transactions, the largest deal was Clariant’s acquisition of Canadian cosmetic ingredient company Lucas Meyer Cosmetics from IFF for $810 million. The second-largest deal is Global New Material International’s acquisition of Merck’s global Surface Solutions business.
Givaudan has been the most active acquirer, having launched or completed at least three acquisitions from January 2023 to date. These include the majority stake in Brazil’s Vollmens Fragrance Ltda, the acquisition of Italian innovation company B.Kolormakeup & Skincare, and the purchase of key cosmetic ingredient assets from synthetic biology leader Amyris.
Other notable deals include German ingredient giant Symrise’s February 2023 acquisition of a minority stake in Israeli biotech company Synergio. Synergio specializes in using advanced botanical technology to develop next-generation plant bioactives for the personal care and beauty industry, offering natural, healthy, and sustainable solutions.
Among these deals, Global New Material International stands out as a typical example of a Chinese upstream supply chain company acquiring overseas businesses. Prior to acquiring Merck’s Surface Solutions unit, the company had announced in January 2023 that it would acquire a 42.45% stake in CQV—Korea’s largest pearlescent pigment company—for 85.9 billion won, becoming its largest shareholder. That deal was completed in August 2023.
In addition, some upstream companies are also moving downstream to acquire brands. For instance, in February 2023, Chinese contract manufacturer Pechoin announced plans to acquire a 16.4967% stake in personal care brand Voolga for RMB 471 million. The deal was completed in November of the same year.
All signs point to a sweeping wave of upstream supply chain consolidation in the beauty industry. Globally, whether raw material suppliers or brand powerhouses, many are seeking growth and scale through mergers and acquisitions. One industry veteran commented that due to the highly segmented nature of raw material product lines, it’s difficult for companies to enter new categories through R&D alone—acquisition is often the most effective path to expansion.
It’s worth noting that the current M&A wave in beauty supply chains is no longer limited to international giants but is now extending to Chinese companies and the Chinese market. This shift underscores the rise of China’s raw materials industry and signals that, in an increasingly competitive global beauty market, ongoing acquisitions are becoming a necessity for both international and domestic players seeking to maintain their foothold.
