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L’Oreal to Acquire 10% Stake in Swiss Skin Care Company Galderma 

A logo is seen over the entrance of Cosmetics company L'Oreal building in Paris, August 16, 2013. (Reuters)
A logo is seen over the entrance of Cosmetics company L'Oreal building in Paris, August 16, 2013. (Reuters)
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L’Oreal to Acquire 10% Stake in Swiss Skin Care Company Galderma 

A logo is seen over the entrance of Cosmetics company L'Oreal building in Paris, August 16, 2013. (Reuters)
A logo is seen over the entrance of Cosmetics company L'Oreal building in Paris, August 16, 2013. (Reuters)

French cosmetics company L'Oreal is to acquire a 10% stake in Swiss skin care firm Galderma from a group of major shareholders, the two companies said on Monday.

The Swiss firm, originally set up as a joint venture between Nestle and L'Oreal, began trading on the Swiss stock exchange in late March, with its shares rising.

Galderma said L'Oreal would acquire the 10% stake for an undisclosed premium from Sunshine SwissCo AG - a consortium led by Swedish private equity firm EQT - Abu Dhabi Investment Authority (ADIA) and Auba Investment Pte. Ltd.

Galderma said it had signed a memorandum of understanding with L'Oreal to work towards a new research and development collaboration in the form of a scientific partnership focused on complementary research projects.

"It marks an ambitious step for L'Oreal, 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 beauty play," said Nicolas Hieronimus, Chief Executive Officer of L'Oreal.

"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'Oreal said it will not seek to be represented at Galderma's board of directors and has agreed to customary provisions for an investment of this type as part of a shareholders' agreement with Sunshine SwissCo.

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Fashion

L'Oreal 2Q Sales Grow 5.3%, Slower than Forecast

The logo of French cosmetics group L'Oreal is seen on a company building in Paris, France, February 7, 2024. (Reuters)
The logo of French cosmetics group L'Oreal is seen on a company building in Paris, France, February 7, 2024. (Reuters)
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L'Oreal 2Q Sales Grow 5.3%, Slower than Forecast

The logo of French cosmetics group L'Oreal is seen on a company building in Paris, France, February 7, 2024. (Reuters)
The logo of French cosmetics group L'Oreal is seen on a company building in Paris, France, February 7, 2024. (Reuters)

French cosmetics giant L'Oreal reported a 5.3% rise in second-quarter sales, below expectations and likely further rattling investors already worried about the lack of rebound in the important Chinese market.

The Paris-based company, which owns the Maybelline and Lancome brands, said on Tuesday that sales in the quarter reached 10.88 billion euros ($11.75 billion), up 5.3% on a like-for-like basis from a year earlier, but undershooting the 5.9% growth seen in a consensus compiled by Visible Alpha.

The company reported negative growth in the North Asia region, hit by weak consumer confidence in China and compared with the strong surge in demand at the same time a year ago.

L'Oreal CEO Nicolas Hieronimus had said last month that the global beauty market was growing more slowly than earlier predicted, at about 4.5%-5%, largely due to a lack of rebound in the Chinese market.

Shoppers in China, which has been one of the world's fastest growing beauty markets, are cutting back on spending over worries about job insecurity and a prolonged real estate slump.

The world's No. 2 economy grew less than expected in the second quarter, prompting consumers to buy fewer creams and lipsticks, both online and in stores.

L'Oreal, whose products span the mass market to the high-end luxury segment, had been expected to outpace its peers, but still see the impact of broadly slower growth.

Its sales in North Asia, which come mostly from mainland China, were down 2.4% like-for-like, compared with a decline of 1.1% in the first quarter.

"In mainland China, the beauty market was negative in the second quarter on a tough comparison base, exacerbated by lasting low consumer confidence," said the company in a statement.

Luxury bellwether LVMH last week said its perfumes and cosmetics sales grew 4% in the second quarter, slowing from 7% in the first three months of the year.

Shares in L'Oreal, Europe's 6th most valuable listed company, with a market capitalization of about 211 billion euros, have lost 12% so far this year, compared to a 31% fall at US peer Estee Lauder.