France's L'Oreal, the world's largest cosmetics company, said it would acquire Chinese skincare firm Mininurse to expand its distribution in China.
The terms of the deal were not disclosed.
Mininurse, with forecast sales of RMB 402.5 million (US$48.6 million) in 2003, is distributed in 280,000 outlets across China and also has a manufacturing facility in Hubei province.
Launched in 1992, the company claims to be one of China's top three skincare firms, with a market share of 5%.
Japan's Shiseido is also looking to China, with projections of 15% to 20% annual increases in revenue over the next 10 years.
Currently, Shiseido derives just 2% to 3% of its annual sales from China.