L’Oréal has announced plans to acquire a 10 percent stake in Swiss skincare company Galderma from a consortium of major shareholders, marking a significant move as the French beauty giant aims to tap into the lucrative medical cosmetics sector. The deal was disclosed on Monday, August 5.
Galderma, which was initially established as a joint venture between Nestlé and L’Oréal, saw L’Oréal sell its 50 percent stake in the company in 2014. The company went public with an initial share offering in late March of this year.
L’Oréal’s acquisition will be made from Sunshine SwissCo, a group led by Swedish private equity firm EQT, alongside Abu Dhabi Investment Authority (ADIA) and Auba Investment. The financial terms of the transaction, including the premium paid, have not been disclosed.
As of the last market close on Friday, Galderma had a market capitalization of nearly 16 billion Swiss francs (approximately S$24.8 billion). The two companies have signed a memorandum of understanding to explore research and development collaborations.
L’Oréal CEO Nicolas Hieronimus highlighted that the investment is part of the company’s strategy to engage with the rapidly growing aesthetics market. “It allows us to explore partnering in the fast-growing aesthetics market, a key adjacency to our own pure beauty play,” Hieronimus said. He expressed strong support for Galderma’s management and strategy, emphasizing confidence in the company’s long-term growth potential.
Following the announcement, L’Oréal’s share price fell by 1 percent, while Galderma’s shares, which include brands like Cetaphil and products for skin conditions such as acne and psoriasis, rose by 4 percent as of 0705 GMT.
Analysts at Jefferies noted that the stake acquisition is a strategic move designed to foster closer cooperation on product development, potentially leading to increased ownership and control in the future.
L’Oréal’s dermatological beauty division, which encompasses brands like CeraVe and La Roche-Posay, has experienced significant growth in recent years, driven by increased consumer interest and social media influence. However, growth in this unit slowed to 10.5 percent in the second quarter, falling short of estimates. Hieronimus attributed this deceleration to intensified competition.
The global aesthetics market is projected to expand to US$25.9 billion from US$15.4 billion in the previous year, according to MarketsandMarkets.
L’Oréal has stated that it will not seek representation on Galderma’s board of directors. The acquisition will be financed through L’Oréal’s available cash and credit lines, with the transaction expected to conclude in the near future.
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