L'Oreal to buy 10% stake in Swiss skincare firm Galderma
Adds comments from Galderma CEO after analyst call, paragraphs 12-13
By Dave Graham and Dominique Patton
ZURICH/PARIS, Aug 5 (Reuters) -L'Oreal OREP.PA will acquire a 10% stake in Swiss skin care firm Galderma GALD.S from a group of major shareholders, the two companies said on Monday, as the French firm seeks a cut of the profits from the booming injectable cosmetics market.
Galderma, originally set up as a joint venture between Nestle NESN.S and L'Oreal before the latter sold its 50% stake in 2014, listed an initial tranche of its stock in late March.
L'Oreal is buying the stake at an undisclosed premium from Sunshine SwissCo AG - a consortium led by Swedish private equity firm EQT - Abu Dhabi Investment Authority and Auba Investment Pte. Ltd in a deal due to be completed in the coming days.
Shares in Galderma, which had a market capitalisation of almost 16 billion Swiss francs ($18.85 billion) at Friday's market close according to LSEG data, jumped over 7% after the news before trimming gains. L'Oreal shares were largely flat.
The stake, worth 1.6 billion Swiss francs based on Galderma's market cap, is small for the French giant, which said it will fund the purchase via available cash and credit lines.
It marks a shift in its strategy, giving L'Oreal a stake in injectable products that reduce wrinkles such as fillers and neuromodulators, which include botox, for the first time.
"It allows us to explore partnering in the fast-growing aesthetics market, a key adjacency to our own pure beauty play," L'Oreal CEO Nicolas Hieronimus said in a statement.
About half of Galderma's revenue comes from injectables. The market was worth 9.3 billion euros last year, Hieronimus told analysts on a call.
"The penetration rate of these procedures already stands at mid-single digits and looking at the number of people who consider using these procedures, the penetration rate could double in the next decade," he said.
The two companies also signed a memorandum of understanding to work on research and development collaboration. The deal will ultimately enable the pair to jointly develop new products to expand their respective portfolios, Galderma said.
"The stake is positioned as a strategic interest, to facilitate cooperation on product development, but we assume that this is also a way to get closer to Galderma with a view of higher ownership/control over time," said analysts at Jefferies.
Galderma CEO Flemming Ornskov said he would not speculate on whether L'Oreal's stake could increase, but noted the French firm had undertaken a "prolonged" standstill agreement with the shareholders, and tender obligations, without giving details.
"We are competitors," he told an analyst call. "And we will continue to be strong competitors."
L'Oreal will not take a seat on Galderma's board to prevent any relationship on similar business activity, executives said.
The two firms also compete in skincare with Galderma's Cetaphil brand and L'Oreal's CeraVe.
L'Oreal's dermatological beauty division, which also includes the La Roche-Posay brand, has grown by high-double digits in recent years, boosted by social media and consumer interest in science since the COVID pandemic.
But growth in the unit slowed in the second quarter to 10.5%, missing estimates, partly due to increasing competition.
The global aesthetics market is predicted to grow to $25.9 billion by 2028 from $15.4 billion last year, according to MarketsandMarkets.
($1 = 0.8486 Swiss francs)
Reporting by Dave Graham in Zurich and Dominique Patton in Paris; additional reporting by Gianluca Lo Nostro; editing by Friederike Heine, Miranda Murray, Kirsten Donovan and David Evans
Actifs liés
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.
