Nestle branches out into skin care

JOHN HEILPRIN
Last updated 10:24 12/02/2014

Relevant offers

World

Deutsche Bank crisis - Germany's biggest bank is hit by US$14b in fines Amazon on the hunt for warehouse space in Australia Toxic Indian lake is 'superbug hotspot' US election: Donald Trump's wealth shrunk by $1b last year, says Forbes Job losses in Australian steel industry linked to a rise in domestic violence Last-ditch plea to US Congress to adopt landmark TPPA deal Russian airline owner aims to beat Elon Musk and Jeff Bezoz to space Vancouver, London top list of cities at risk of housing bubble UberEats expanding to new international markets How advertisers turned the US presidential debate into a new Super Bowl

Swiss food and drink group Nestle is creating a new unit for medical skin treatments via a deal that reduces its stake in French cosmetics company L'Oreal.

The Vevey, Switzerland-based company said on Tuesday it would take full ownership of Swiss dermatology pharmaceuticals company Galderma, which had been a 50/50 joint venture with L'Oreal.

It will use Galderma's management to form a new unit called Nestle Skin Health SA.

Nestle is striving to reposition its food-and-beverage business more into the nutrition and wellness fields.

Galderma's business fits in that new mold.

"The future of skin health and dermatology is a buoyant market globally," Nestle chief executive Paul Bulcke said.

Galderma, a Swiss company created in 1981, sells products in 70 countries that treat skin diseases including acne, psoriasis and cancer. The deal is subject to regulatory approval.

As part of the complicated deal, which is valued at €6.5 billion ($10.7 billion), Nestle's stake in L'Oreal will fall from 29.4 per cent to 23.3 per cent.

L'Oreal will buy back €48.5 million of its own shares and then cancel them.

Nestle chairman Peter Brabeck-Letmathe said the deal did not mean the company was abandoning its involvement in L'Oreal.

"Nestle will continue to support the development of L'Oreal as in the past 40 years," he said.

Following the share buyback and cancellation, the Bettencourt Meyers family's stake in L'Oreal will increase from 30.6 per cent to 33.3 per cent.

Ad Feedback

- AP

Special offers

Featured Promotions

Sponsored Content