Nestle to examine strategic options for skin health unit
(Adds detail, background)
By John Revill
ZURICH, Sept 20 (Reuters) - Nestle said on Thursday
it was exploring strategic options for its skin health business,
saying it believes the unit - once seen as a rising star - might
be better off outside of the Swiss food maker.
Following a strategic review earlier this year, Nestle's
board decided to increase the company's focus on food, drinks
and nutritional health products.
The move comes as the KitKat chocolate bar maker has come
under pressure from New York-based hedge fund Third Point, run
by investor Daniel Loeb, who has demanded a bolder and faster
overhaul at the world's biggest food group
"The board has come to the conclusion that the future growth
opportunities of Nestle Skin Health lie increasingly outside the
group's strategic scope," Nestle said. "The board has therefore
decided to explore strategic options for Nestle Skin Health."
Nestle's skin health business sells dozens of different
products via prescription, over the counter and as corrective
and aesthetic products which are used by doctors.
"Sharpening our strategic focus on Nestle's core food,
beverage and nutritional health products offers the best
opportunity for long-term profitable growth and is fully in line
with the pursuit of our company's purpose," said Paul Bulcke,
The business, which Nestle created in 2014 when it acquired
L'Oreal's stake in Galderma, employs 5,000 people and
posted sales of 2.7 billion Swiss francs ($2.79 billion) in
The division has struggled in recent years, with Nestle
cutting 450 jobs at one of their research and development centre
in southern France last year.
Lean sales led the company to also shut a factory in
Switzerland in August last year.
Skin treatments had been a major part of a push by Nestle
into higher growth and more profitable health products to
counter a slowdown in its traditional food businesses, which
range from Purina pet food to Perrier water.
However, the move turned sour, prompting Nestle to launch
the review, which is due to be completed by mid-2019.
"As a consequence, our board is convinced that exploring
strategic options for Nestle Skin Health is in the best
long-term interest of this business and Nestle shareholders,"
($1 = 0.9673 Swiss francs)
(Reporting by John Revill; Editing by Subhranshu Sahu and
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