L'Oréal (OR) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of a 10% minority stake in Galderma aligns with a strategy to expand into the fast-growing injectable aesthetics market and complement core beauty offerings.

• The investment provides exposure to a €9.3 billion market in 2023 with a 12% CAGR over the past five years, and penetration rates expected to double in the next decade.

• The partnership aims to blend expertise in skin biology, diagnostics, and dermatological solutions, supporting a holistic approach to beauty across diagnostics, topicals, devices, and treatments.

• Galderma has transformed into a pure-play dermatology leader, now deriving over 80% of its business from injectable aesthetics and dermatological skincare.

Financial terms and conditions

• The deal involves a 10% equity stake in Galderma, acquired from a consortium led by EQT, ADIA, and Auba Investment Pte. Ltd., with a shareholders' agreement including standard provisions to protect interests and ensure long-term partnership.

• The transaction will be funded with available cash and credit lines and will be implemented via an off-market block trade.

• No board seat will be taken, and customary shareholder provisions are in place.

Synergies and expected cost savings

• The scientific partnership aims to leverage complementary expertise: Galderma's injectable aesthetics and therapeutic dermatology with L'Oréal's skin biology, diagnostic tools, and evaluation methods.

• Focus on exploring synergies between injectables and topicals, as many dermatologists already combine both in practice.