Nestlé to Exit Medical Dermatology with $10.2 Billion Sale of Skin Health Division

VCBeat (WeChat Official Account: vcbeat) has learned that Nestlé recently announced it is in exclusive negotiations with a consortium led by EQT Partners and a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) to sell its Skin Health division for CHF 10.2 billion. The transaction is expected to be completed in the second half of 2019.

Nestlé Skin Health, headquartered in Lausanne, Switzerland, employs 5,000 people across 40 countries and regions. Upon completion of the divestiture, these 5,000 employees, along with Nestlé Skin Health’s prescription brands—including the topical acne medication Epiduo, the aesthetic product Restylane, and consumer solutions Proactiv and Cetaphil—will be transferred to a consortium led by EQT Partners and a wholly owned subsidiary of ADIA.

In 2014, Nestlé acquired full ownership of dermatology specialist Galderma from its joint venture partner L’Oréal for $3.6 billion, marking a significant expansion into the medical skincare sector. This acquisition signaled Nestlé’s strategic shift toward focusing on health-related businesses.

To implement this development strategy, Nestlé acquired several cosmetic products from Valeant, including Restylane, for $1.4 billion. In 2016, Nestlé appointed Stuart Raetzman, then CEO of Galderma, to oversee the division’s operations.

However, Nestlé Skin Health faced operational difficulties as its product portfolio failed to meet expected growth targets. In 2017, Nestlé laid off 450 employees at a French R&D facility and closed a Swiss factory that produced sunscreens and other skincare products.

Nestlé stated that in 2017, its Skin Health division contributed approximately CHF 2.7 billion in net sales to the company; in 2018, the division’s net sales reached CHF 2.8 billion, accounting for only about 3% of Nestlé’s total sales. Currently, the company is refocusing its business priorities on food and nutrition.

EQT Partners was founded in Stockholm, Sweden, in 1994, and primarily invests in companies across Northern Europe, Eastern Europe, Asia, and the United States. To date, EQT Partners has raised approximately €13 billion across 12 funds.

ADIA is an independent investment institution established by the Abu Dhabi government in 1976, with its headquarters in Abu Dhabi, United Arab Emirates. Since its inception, ADIA has maintained a rigorous investment process, dedicated to generating long-term and stable returns within defined risk parameters. Currently, ADIA manages a diversified global portfolio spanning more than twenty asset classes.

(Compiled by Li Chengping)