NESTLE, EQT-LED GROUP IN EXCLUSIVE TALKS

Potential 10.2b franc sale will be one of the biggest private-equity deals this year

NESTLE SA has entered exclusive talks to sell its skincare business to a group led by EQT Partners for 10.2 billion Swiss francs (RM42.12 billion) in what would be one of the biggest private-equity deals this year.

The discussions with the consortium, led by EQT and the Abu Dhabi Investment Authority, are moving ahead as the world’s largest food company wraps up a hotly contested sale process for its moisturisers, acne treatments and wrinkle fillers. The unit had revenue of 2.8 billion francs last year.

Selling dermatological brands would dismantle a business that chief executive officer Mark Schneider ’s predecessor, chairman Paul Bulcke, touted as a

promising new avenue of growth when he led the company.

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

Nestle said the deal was subject to employee consultations and was expected to close in the second half, at which time the food company would give details on what it planned to do with the proceeds.

The skincare unit has been a weak spot, with activist investor Dan Loeb at hedge fund Third Point saying Nestle’s foray into the business appeared unrelated to its core portfolio and should be unwound.

Still, the unit attracted interest from at least a dozen potential bidders during the auction, according to people familiar with the matter.

EQT, the Nordic region’s biggest private equity firm, is exploring a potential initial public offering. It has raised more than €60 billion (RM280.8 billion) 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 10 per cent in its most recent funds, according to the company’s website.

In addition to interest from private-equity and sovereign wealth fund bidders, the unit attracted companies focused on health products.

Colgate-Palmolive Co and Unilever NV had made offers for the consumer arm, which includes over-the-counter products such as Cetaphil and Proactiv, while PAI Partners and Baring Private Equity made a joint bid for the medical treatments business known as Galderma, said people familiar with the process.