In its attempt to shrink its product portfolio, Swiss-based food giant Nestle has agreed to sell an 8% stake (equal to 48.5 million shares) back to L’Oreal, meaning its ownership will fall back to 23.29% once the deal is closed
In exchange Nestle will receive $4.64 billion in cash and a 50% stake in Galderma, a Swiss skincare company valued at 3.1 euro ($4.2 billion), through which it will set up a new healthcare business.
The new wholly-owned subsidiary will “offer a broad range of innovative and scientifically-proven products,” the company said on its website.
Nestlé is pursuing its “strategic development in nutrition, health and wellness by expanding its activities to medical skin treatments,” company chairman Peter Brabeck-Letmathe reported, adding: “Galderma’s management will run the new entity”.
For L’Oreal, the exit from Galderma, which makes treatments for acne and skin cancer, is part of the firm’s plans “to focus exclusively on its cosmetics business”, according to sources.
Source: The Local