(Updates with shares in fifth paragraph.)
May 28 (Bloomberg) -- Nestle SA, the world’s biggest food company, said it will expand its skincare unit in North America by paying $1.4 billion in cash for commercial rights to sell some Valeant Pharmaceuticals Inc. products.
The purchase includes corrective facial aesthetic treatments Restylane, Perlane and Emervel in the U.S. and Canada, as well as Dysport, an aesthetic dermatology treatment. Nestle, whose Galderma unit already sells those medicines outside North America, will also acquire global rights for Sculptra.
The Swiss company is boosting its skin-health division as sales at its main food business struggle. The Nescafe maker made a foray into specialized medical skin treatments in February, when it bought L’Oreal’s share of Galderma, a dermatology company whose products revive skin. Galderma will become part of a new division known as Nestle Skin Health SA, with a brand stable ranging from prescription drugs to over-the-counter soaps and sunscreens for skin, hair and nails.
“It’s strategically sensible, since Nestle had signaled it is interested in building a dermatology business long-term,” said Eddy Hargreaves, an analyst at Canaccord Genuity Corp. in London.
Nestle shares rose 0.4 percent to 69.85 Swiss francs at 9:11 a.m. in Zurich.
The strategic shift comes after Nestle agreed to sell part of its stake in L’Oreal SA in February, its first sale of shares after four decades of ownership. Nestle reported its worst first-quarter sales growth since 2009 on pricing pressure in Europe and decelerating conditions in emerging markets.
Dysport is a prescription injection for temporary improvement in the look of moderate-to-severe frown lines, while Restylane and Perlane are gel formulations that reduce facial wrinkles and fold.
Valeant in April offered to buy Allergan Inc., the maker of the Botox wrinkle treatment. Allergan has said the offer is too low and creates “significant risks” and uncertainties for its shareholders because they would be receiving Valeant stock.
Today’s transaction “dovetails well” with the bid for Allergan, though isn’t contingent on it, Valeant said.
Credit Suisse Group AG advised Galderma.
--With assistance from Gabi Thesing in London.