Business World

Monday 23 September 2019

Nestlé plans €9bn sale of skincare business to Abu Dhabi investors

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Sarah Syed, Corinne Gretler and Ruth David

NESTLÉ has entered exclusive talks to sell its skincare business to a group led by EQT Partners for 10.2bn Swiss francs (€9bn) in what would be one of the biggest private-equity deals this year.

The discussions with the consortium, which is co-led by the Abu Dhabi Investment Authority, are moving ahead as the world's largest food company wraps up a hotly-contested sale process for its Cetaphil moisturisers and Proactiv acne treatments. The unit had revenue of 2.8bn francs in 2018.

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In Nestlé's biggest divestment in more than a decade, CEO Mark Schneider is dismantling a business that his predecessor, chairman Paul Bulcke, touted as a promising new avenue just years ago.

Mr Schneider has instead been focusing on products such as coffee, water and pet food as Nestlé works to spur sales and revamp growth.

The agreed deal is the second major transaction for EQT, the Nordic region's biggest private equity firm, this month.

The skincare unit had been a weak spot, with activist investor Dan Loeb at hedge fund Third Point saying that Nestlé's foray into the business was unrelated to its core portfolio and should be unwound.

After an efficiency drive at the unit, which shed a fifth of its employees, at least a dozen potential bidders showed interest in the auction, according to people familiar with the matter.

While sales have kept growing, Nestlé had made it clear the business didn't fit into Mr Schneider's strategy.

EQT is exploring an initial public offering, having raised more than €60bn since it was started about 25 years ago.

Investor AB, founded by the wealthy Wallenberg family, is the firm's anchor investor with an ownership of about 10pc in its most recent funds, according to the company's website.

Bloomberg

Irish Independent

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