UPDATE 3-Nestle boosts skincare business with $1.4 bln Valeant deal

Wed May 28, 2014 11:09am EDT
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* Nestle will get N. America rights to skincare products

* Valeant says deal clears way for it to buy Allergan (Adds more analyst comments, background)

By Martinne Geller and Alice Baghdjian

LONDON/ZURICH, May 28 (Reuters) - Swiss food group Nestle accelerated a push into the fast-growing skincare market on Wednesday, buying the rights to several injectable treatments for facial wrinkles and lines from Valeant Pharmaceuticals International for $1.4 billion.

The world's biggest food group, with brands including KitKat chocolate bars, Gerber baby food and Nescafe coffee, signalled its ambitions in skin health products in February by taking over the Galderma dermatology venture it had with L'Oreal.

Wednesday's move gives Nestle the North American rights to some products taken on in that deal, boosting its control of the brands and avoiding the situation with KitKat, to which rival Hershey owns the rights in the United States.

For Quebec-based Valeant, the cash deal clears a potential antitrust hurdle to its proposed $49 billion takeover of U.S. rival Allergan Inc, which makes Botox, used to treat conditions from frown lines to overactive bladder.

For Nestle, the deal marks the latest step in a march begun almost two decades ago by Chairman and then-CEO Peter Brabeck-Lemathe to transform the sweets company into a global leader in nutrition, health and wellness, although some analysts question whether cosmetic skin treatments fit into that category.

"They are trying to squeeze it under a wellness umbrella. It's a stretch," said a European food analyst.   Continued...