World richest woman, Francois Betterncourt’s L’Oréal has announced plans to acquire a 10% stake valued at $1.85 billion in Swiss skincare company Galderma from a consortium of key shareholders according to Wall Street Journal.
The deal involves the acquisition of shares from Sunshine SwissCo AG, a consortium that includes Swedish private equity firm EQT, the Abu Dhabi Investment Authority, and Auba Investment Pte. Ltd., as confirmed on Monday.
Galderma’s market capitalization was valued at nearly 16 billion Swiss francs ($18.85 billion) at last Friday’s market close, according to LSEG data.
Established initially as a joint venture between Nestlé and L’Oréal, Galderma gained full independence after L’Oréal sold its 50% stake in 2014. The company, recognized for its Botox alternative Dysport and the widely popular skincare range Cetaphil, took a significant step forward by going public earlier this year.
L’Oréal CEO Nicolas Hieronimus described the stake acquisition as a strategic move to strengthen the company’s position in the aesthetics market, an area closely aligned with its existing beauty portfolio. “This investment enables us to explore collaboration in the fast-growing aesthetics sector, a key adjacency to our core beauty business,” Hieronimus said.
The acquisition will be funded through L’Oréal’s existing cash reserves and credit lines, with the transaction expected to close in the near term.
What to know
The two companies have entered into a memorandum of understanding to collaborate on research and development, deepening L’Oréal’s engagement in the rapidly growing dermatological and aesthetic treatment markets. Despite acquiring a stake, L’Oréal has indicated that it does not plan to seek board representation at Galderma, emphasizing its respect for the Swiss firm’s operational autonomy.
There are speculations that this investment could eventually lead to L’Oréal increasing its ownership in Galderma, potentially paving the way for greater control or even a full acquisition in the future. Following the announcement, shares in Galderma surged by 4 percent, while L’Oréal’s stock experienced a slight dip of 1%.
L’Oréal’s dermatological beauty division, which includes popular brands such as CeraVe and La Roche-Posay, has enjoyed strong growth in recent years, driven by rising consumer demand for scientifically-backed skincare products. However, growth in this segment slowed to 10.5 percent in the second quarter, falling short of analyst expectations, a decline attributed by CEO Nicolas Hieronimus to intensifying competition.
The global aesthetics market is expected to see substantial growth, with forecasts projecting an increase from $15.4 billion last year to $25.9 billion. L’Oréal’s strategic stake in Galderma positions the company to benefit from this upward trend.
