L'Oreal, the world's largest cosmetics group, has offered to acquire Chinese skincare company Magic Holdings International for HK$6,538 million (€632 million).

Paris-based L'Oreal announced its move for the Hong Kong-listed maker of facial masks yesterday and said that its HK$6.30-per-share offer is supported by Magic's board of directors.

"Six key shareholders, representing 62.3% of the company's equity, are already committed to supporting L'Oreal's proposal," the French company said in a statement, adding that the deal would be subject to approval from the Chinese Ministry of Commerce.

The offer represents a 25% premium to Magic's last closing price before trading in the shares was suspended on 12 August to prevent speculation.

The deal is expected to be financed through L'Oreal's internal resources and a €650 million credit facility from BNP Paribas, the two companies said in a joint statement.

On completion, Magic Holdings shares are expected to be withdrawn from the Hong Kong stock exchange.

China is L'Oreal's third-largest market behind the United States and France.

L'Oreal, the products of which include Garnier shampoo and Yves Saint Laurent perfume, posted a 5.2% rise in quarterly sales last month, boosted by higher growth in newer markets such as the Asia-Pacific region.

The French company said that Magic achieved sales worth €150 million in 2012, up 29% on the previous year.