Gao Demei has signed an agreement to acquire ZO Skin Health from shareholders including the Blackstone Tactical Opportunity Fund and the Obagi family, in a transaction worth $1.5 billion. The acquisition will be funded jointly by existing cash reserves and bank financing. ZO Skin Health is “a leading doctor channel skincare brand based on clinical science and standardized daily care solutions.” For the past twelve months up to June 2026, ZO Skin Health had net sales of approximately $330 million. Gao Demei plans to increase commercialization investment in the first year after the acquisition is completed to lay a solid foundation for growth in the second year of transaction delivery. The transaction is expected to slightly dilute the Group's profit margin before core interest, tax, depreciation and amortization in 2027, and the profit margin will roughly return to the Group average from 2028. It is expected that in the first full year after delivery, the acquisition will have no impact on the Group's core earnings per share, and is in line with Gao Demei's goal of maintaining a steady investment-grade credit rating. The transaction is expected to close in the fourth quarter of 2026 or early 2027, subject to regulatory approval and other routine delivery conditions.

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