PARIS — L’Oréal’s deal to accumulate Aesop was lauded Tuesday by financial analysts, who expect the French beauty giant to leverage that business abroad, especially in China, travel retail and fragrance.

As previously reported, it was revealed late Monday that L’Oréal has signed an agreement to buy the Australian luxury personal care company from Natura & Co.

The proposed transaction values Aesop at an enterprise value of greater than $2.5 billion.

“The valuation is nice for an asset growing 20 percent per 12 months and EBITDA margins of 20 percent, and the brand only recently expanded into China, which leaves loads of headway for future growth,” wrote Bruno Monteyne, senior analyst of European food, European household and private care at Bernstein, in a note.

“L’Oréal will help Aesop to further expand in other regions, especially China where it harbors huge potential,” agreed next-gen consumer analysts at Bryan, Garnier & Co., in a note.

Analysts lauded Aesop’s positioning as a clean and sustainable brand, which is particularly key for young demographics.

“It also sits within the premium beauty space which is the more attractive a part of beauty, and which enable direct-to-consumer sales,” wrote Monteyne.

“The deal marks a shift in L’Oréal’s M&A method, having typically targeted brands at an earlier stage of their development to reap significant revenue synergies,” wrote Molly Wylenzek, an equity analyst at Jefferies, in a note.

For example, one other recent L’Oréal acquisition was of Skinbetter Science, in September 2022. That company’s sales were almost $95 million within the 12 months ended Aug. 31, 2022.

Wylenzek underlined that Aesop’s development is well underway already, with greater than $500 million in annual sales and a reach of 29 geographic markets.

“But some white spots like China (two retail stores currently), travel retail and fragrance (recently added to the portfolio) remain,” wrote Wylenzek.

L’Oréal stock closed up 1.2 percent to 420.35 euros on the Paris Bourse Tuesday.