L’Oréal announced on Monday that it will acquire a 10% stake in Swiss skincare company Galderma from a consortium of major shareholders. This strategic move is aimed at tapping into the lucrative medical cosmetics market. The stake will be purchased from Sunshine SwissCo AG—a consortium led by Swedish private equity firm EQT, Abu Dhabi Investment Authority (ADIA), and Auba Investment Pte. Ltd.—at an undisclosed premium.
Galderma, initially a joint venture between Nestlé and L’Oréal, saw L’Oréal divest its 50% stake in 2014. The company went public with an initial stock offering in late March. As of the close of trading on Friday, Galderma’s market capitalization stood at nearly 16 billion Swiss francs ($18.85 billion), according to LSEG data.
The acquisition includes a memorandum of understanding between L’Oréal and Galderma for collaborative research and development. L’Oréal CEO Nicolas Hieronimus emphasized the strategic importance of this investment, noting, “It allows us to explore opportunities in the fast-growing aesthetics market, which complements our core beauty operations. We support Galderma’s management and strategy, and we are confident in its long-term growth prospects.”
Following the announcement, L’Oréal’s shares declined by 1%, while Galderma’s shares rose by 4%. Analysts from Jefferies observed that the acquisition might signal a long-term strategy to increase L’Oréal’s influence over Galderma, possibly leading to a larger stake in the future.
L’Oréal’s dermatological beauty division, which includes brands such as CeraVe and La Roche-Posay, has experienced high double-digit growth over recent years, driven by increased consumer interest and social media influence. However, growth slowed to 10.5% in the second quarter, falling short of estimates, with competition cited as a contributing factor.
The global aesthetics market is projected to expand from $15.4 billion to $25.9 billion, according to MarketsandMarkets. L’Oréal plans to fund the acquisition through its available cash and credit lines and will not seek representation on Galderma’s board of directors. The transaction is expected to be completed in the coming days.
Read More: Click Here
