Beauty's dermatological era is in full swing. Earlier this year, we reported that the U.S. dermatological skin care sector, which is valued at about $4.9 billion, is dominated by mass brands, the leaders being CeraVe and Cetaphil. With CeraVe parent L’Oréal now taking a 10% stake in Cetaphil parent Galderma Group AG, the two brands are closer than ever. The deal includes not only an investment, but also a scientific partnership to jointly develop new products across both companies to address the signs of skin aging. For L'Oreal, the deal signals a pursuit of the aesthetics market.
Beauty's dermatological era is in full swing. Earlier this year, we reported that the U.S. dermatological skin care sector, which is valued at about $4.9 billion, is dominated by mass brands, the leaders being CeraVe and Cetaphil. With CeraVe parent L’Oréal now taking a 10% stake in Cetaphil parent Galderma Group AG, the two brands are closer than ever. The deal includes not only an investment, but also a scientific partnership to jointly develop new products across both companies to address the signs of skin aging. For L'Oreal, the deal signals a pursuit of the aesthetics market.
The deal follows the release of L'Oreal's latest financial results, which showed that dermatological beauty sales growth spiked 16.4% like-for-like/15.5% as reported, driven by North Asia, particularly SkinCeuticals and CeraVe expansions in China.
L'Oreal's Pursuit of the Aesthetics Market
The scientific partnership comes as L'Oreal expands its focus on diagnostic tools, high-performance topical products, consumer device, and aesthetic treatments that correct, repair, prevent, anticipate and "intercept" the signs of skin aging.
The partnership will tap into Galderma's dermatology expertise, including injectable aesthetics, as well as its specialization in dermatologic drugs, hyaluronic acid fillers, neuromodulators and biostimulators.
“I am very pleased to announce this strategic investment and partnership with Galderma. 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 beauty play” said Nicolas Hieronimus, CEO 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.”
“We are on a journey of growth, innovation and leadership in the field of dermatology, powered by our unique integrated model," said Flemming Ornskov, M.D., MPH, CEO of Galderma. "As we continue to deliver outstanding performance across our blockbuster platforms in attractive dermatology market segments, our commitment to progressing our current late-stage pipeline and advancing science and innovation remain a cornerstone of our approach. We are delighted to welcome L’Oréal as a new, long-term Galderma shareholder and see their investment as a sign of confidence in our strategy, track record and growth potential. We look forward to pursuing scientific partnership opportunities together, for the benefit of the customers, patients and consumers we serve across the globe every day.”
Michael Bauer, partner and co-head of global healthcare sector, EQT, added, “This transaction is part of our strategy to continue supporting Galderma on its outstanding growth journey in the attractive dermatology market. We remain committed to Galderma and will continue managing our investment in the best interest of all its shareholders. Selling a minority stake to a reputable strategic partner such as L’Oréal, the global leader in Beauty, is a direct reflection of our commitment.”
About the L'Oreal-Galderma Deal
L'Oreal acquired its 10% stake in Galderma from Sunshine SwissCo AG (a consortium led by EQT), Abu Dhabi Investment Authority (ADIA) and Auba Investment Pte. Ltd. for a non-disclosed amount.
L’Oréal will not be represented at Galderma’s board of directors.
Per an official announcement, "The transaction will be funded with L’Oréal’s available cash and credit lines, and closing is expected to be completed in the coming days."
