The 10% Stake Sees L’Oréal Progress Further into the Dermatological Market
L’Oréal has ramped up its access to the dermatological products industry by procuring a 10% stake in Galderma. Formerly co-founded by the brand, Galderma is a pioneering leader in dermatology, particularly in the area of injectable aesthetics.
The stake in Galderma Group AG was procured from Sunshine SwissCo AG, a consortium steered by EQT, the Abu Dhabi Investment Authority, and Auba Investment Pte. Ltd. The terms of the financial agreement were not mentioned.
L’Oréal disclosed that the transaction would be facilitated through an off-market block trade with the EQT-led consortium. The company stated, “L’Oréal and the EQT-led consortium do not intend to act in concert.”
The deal is to be financed using available cash and credit lines of L’Oréal, with closure expected within several days.
Alongside this acquisition, L’Oréal and Galderma have committed to a new strategic research collaboration which will capitalize on Galderma’s proficiency in dermatological solutions and L’Oréal’s expertise in skin biology, diagnostic tools, and evaluation methods.
Galderma was initially instigated in 1981 as a collaborative venture between L’Oréal and Nestlé. The primary brand of Galderma, Cetaphil, has been around since 1947. In 2014, Nestlé obtained L’Oréal’s 50% stake in Galderma. Subsequently, in 2019, EQT Partners investment group alongside a wholly-owned subsidiary of the Abu Dhabi Investment Authority purchased the skincare company, then acknowledged as Nestlé Skin Health, for 10.2 billion Swiss francs. The group was rebranded as Galderma afterward.
Today, Galderma is recognized in more than 90 countries globally and boasts 6,500 worldwide employees. It markets brands include Actinica, Benzac, Azzalure, Differin, and Dysport, offering a comprehensive portfolio of the dermocosmetics, dermatological drugs, and skin treatments including hyaluronic acid fillers and neuromodulators.
As per recent events, Galderma went public on the SIX Swiss Exchange in Zurich on March 22, ending the first trading day with a 20.75% increase.
Nicolas Hieronimus, CEO of L’Oréal, commented on the acquisition, stating,
It marks an ambitious step for L’Oréal, and true to our mantra of ‘seize what is starting,’ it allows us to explore partnering in the fast-growing aesthetics market, a key adjacency to our own pure play. We fully support Galderma’s management and its strategy as a leading dermatology pure player, respect its independence and are very confident in its long-term growth potential.”
L’Oréal is increasingly implementing a holistic approach in its investments as the world’s leading beauty company and beauty tech firm. “This approach aims to blend diagnostic tools, high-performance topical products, consumer devices and aesthetic treatments, to deliver new combined levels of performance by correcting, repairing, preventing, anticipating and intercepting the signs of skin aging,” according to L’Oréal.
L’Oréal complimented Galderma’s progress over the previous decade, attributing it to CEO Flemming Ørnskov’s leadership and the assistance from the EQT-led consortium.
Finally, L’Oréal stated that it would not be pursuing a representative role on Galderma’s board of directors and has accepted standard provisions for this type of investment as part of a shareholder’s agreement formulated with Sunshine SwissCo AG.