Nestle steps up skincare foray
Print Edition
SWISS food group Nestle stepped up its drive into the fast-growing skincare market yesterday, buying the rights to several treatments for facial lines and wrinkles from Valeant Pharmaceuticals International for US$1.4 billion in cash.
The world’s biggest food group, with brands including KitKat chocolate bars, Gerber baby food and Nescafe coffee, signaled its ambitions in skincare in February by taking over the Galderma dermatology venture it had with L’Oreal.
Yesterday’s move gives Nestle the North American rights to some products taken on in that deal, boosting its control of the brands and avoiding the situation with KitKat, to which rival Hershey owns the rights in the United States.
Citing data from GlobalData Facial Aesthetics, Vontobel analysts said the US market for Botox and other wrinkle fillers is set to grow from US$2.5 billion in 2013 to US$4.7 billion in 2018 — a compound annual growth of 13.5 percent.
“These figures speak for themselves and explain how strategic the deal is for Nestle/Galderma,” the analysts said in a research note. “Nestle did not want to be in a similar situation as for Hershey (with KitKat).”
European food groups, struggling with weak economies, are moving into health and personal care markets in pursuit of higher growth and margins. Unilever has been selling underperforming food brands and focusing on personal care products like soap and shampoo.
Nestle said the deal with Canada’s Valeant would give it the US and Canadian rights to sell the Restylane, Perlane and Emervel cosmetic facial treatments it already makes, as well as Dysport, a cosmetic treatment owned by Ipsen.
It is also buying from Valeant a dermal filler for cosmetic and medical use called Sculptra.
Quebec-based Valeant, which inherited the North American rights in its 2012 acquisition of Medicis, said the deal was not contingent on the success of its bid for US drug company Allergan Inc.
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