L’Oreal to increase stake in skin care firm Galderma to 20%

L’Oreal is buying the stake for an undisclosed sum from a consortium led by Swedish private equity firm EQT , which also includes Abu Dhabi Investment Authority and Auba Investment Pte. Ltd. The deal is due to close in the first quarter of 2026, Reuters reports.

Galderma shares were initially up 3.4% after the news, while L’Oreal slipped 1.6%.

L’OREAL RETURNS TO COMPANY IT HELPED CREATE

Galderma, which has a market capitalisation of over $48 billion according to LSEG data, was originally set up as a joint venture between Swiss consumer goods giant Nestle and L’Oreal before the latter sold its 50% stake in 2014.

The French cosmetics giant bought back into the company last year with a 10% stake.

“We are pleased with L’Oreal’s increased investment, which affirms our direction and the meaningful value creation we expect in the years ahead,” Galderma CEO Flemming Ornskov said.

L’Oreal is looking for new areas of growth and sees the injectable cosmetics market as an area of “adjacency” to its core beauty business, L’Oreal said in the statement announcing the deal.

INJECTABLE COSMETICS SECTOR BOASTS DOUBLE-DIGIT GROWTH

The sector is growing by double-digits annually, driven by an expanding patient base, new technologies, and broader acceptance of treatment, according to a recent McKinsey report.

L’Oreal has also invested in clinics in China and the U.S., citing a need to learn more about the sector.

“Whilst L’Oreal still needs time to understand how the category works, it is a clear message that the company wants to play in procedures,” said analysts at Jefferies.

Galderma listed an initial tranche of its stock in March 2024, and has so far floated more than half of it, according to LSEG data. Its share price has tripled since that IPO.

L’Oreal said Galderma’s board will consider nominating two non-independent directors from L’Oreal to replace the EQT-led consortium’s representatives at the 2026 annual general meeting.

L’Oreal said it does not intend to further increase its Galderma stake. However, Jefferies said it continues to see the possibility of L’Oreal gaining full control over the company over time.

L’Oreal’s additional stake comes two months after it agreed to pay 4 billion euros ($4.66 billion) for Kering’s beauty business. It has also said it will study a potential investment in Armani.