Moody's: Estée Lauder unchanged

Moody's Investors Service said news that Estée Lauder Cos. Inc. plans to acquire Smashbox Beauty Cosmetics, Inc. will have no impact on the company's long-term and short-term ratings of A2 and prime-1, respectively.

The acquisition of Smashbox, which is expected to close in July 2010 and remains subject to regulatory approval, is consistent with Estée Lauder's strategy of acquiring small, highly focused cosmetic brands that complement the company's existing portfolio, Moody's said.

Smashbox is a privately held prestige cosmetics line that should provide Estée Lauder with enhanced capabilities in the assisted open-sell and specialty distribution channels, such as Sephora and Ulta, the agency said.

The ratings continue to reflect the strength of its well known and established portfolio of beauty brands, the agency said.

The ratings are constrained by the company's more limited product diversification and the more discretionary and highly competitive nature of its core prestige beauty business, Moody's added.

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