Thursday 20 September 2018 9:58 am

Nestle announces plans to put skin health unit up for sale


Food giant Nestle today announced plans to sell or spin off its skin health business, prompting speculation the company could get rid of its €26bn stake in L’Oréal.

The company said the move was part of efforts to sharpen its focus on food, beverage and nutritional health products, adding that opportunities for Nestle Skin Health were "outside the group's strategic scope". 

It said it would "explore strategic options" for the division, which makes wrinkle removers, prescription products and consumer healthcare items. 

The move is part of a restructuring of Nestle as it looks to boost profits. It comes days after Nestle offloaded its life insurance arm Gerber Life for $1.55bn. 

Read more: Nestle to flog off insurance unit Gerber Life in $1.55bn deal

Nestle has been under pressure from activist investor Daniel Loeb, whose Third Point hedge fund has urged Nestle to sell its 23 per cent L'Oreal stake. 

"Nestle Skin Health has made significant progress under its new leadership team over the past two years," said chief exec Mark Schneider. "The company has developed convincing growth strategies for each of its business units and regained a competitive cost structure.

"Now is the right time to explore the best ownership structure for Nestle Skin Health and to consider ways of taking it to the next level."

The review of the business is expected to be completed by mid-2019, Nestle said.