When e.l.f. Beauty announced its acquisition of rhode, Hailey Bieber’s minimalist skincare brand, for a headline-grabbing $1 billion, the global beauty landscape was awash with admiration, envy, and misconceptions. Many assumed that the full billion-dollar figure would line Bieber’s pockets overnight. However, in the very high-stakes world of M&A, especially in beauty, deals are rarely so simple.The rhode deal included $800 million upfront ($600 million in cash and $200 million in e.l.f Beauty stock), and potential for a $200 million earnout, contingent on Rhode meeting performance targets over the next three years. This structure, typical in many M&A transactions, proves just how nuanced the acquisition landscape truly is. Today, being acquired is often seen as one of the foremost accomplishments in a brand’s success story. For founders, it’s the ultimate validation and proof that years of bootstrapping, branding, and building have culminated in real commercial value. For buyers, it’s a chance to tap into new audiences, innovation, or cultural relevance that can't be built in-house.What’s in a Deal? Understanding the M&A MechanicsAt its core, an acquisition occurs when one company purchases another, often to expand market share, access new customer bases, or enhance its product offering. A merger, by contrast, typically involves two companies of relatively equal size coming together to form a new entity. “In beauty, people often conflate the two, but they’re distinct,” John Cafarelli, President and co-founder of BeautyMatter explained.