Recall the recent bidding war between Valeant Pharmaceuticals International Inc. (NYSE: VRX) and Merz Pharma Group to buy Obagi Medical Products Inc. (Nasdaq: OMPI), maker of aesthetic and therapeutic skin products. The victory for Valeant, which won after it increased its offer to $418 million from $360 million, portends a larger trend where competition is likely to intensify among strategic buyers in the cosmetics space.

A handful of players in the space are becoming more vocal about putting cash to work. German consumer goods group Henkel AG & Co. KGaA, for example, hasn't made an acquisition since 2008 when it purchased National Starch for €3.7 billion (U.S. $5.7 billion). Today, facilitating larger purchases is once again an option, according to chief executive Kasper Rorsted (pictured). "Large acquisitions are not ruled out," Rorsted said at Henkel's recent annual meeting. The Dusseldorf company has roughly $5 billion on its balance sheet reserved for deals. Henkel's beauty care unit - consisting of hair cosmetics, body care, skin care and oral hygiene products - brings in 21 percent of the company's sales.

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