Nestlé and its participation in L’Oréal
With Nestlé’s recent announcement that it will reduce its holding in L’Oréal, it seems it has disappointed the market which anticipated a bold next move, e.g. either a full takeover or complete exit, by the giant Swiss multi-national.
The takeover of Galderma makes a lot of sense, primarily because it gives investors a clear indication of where Nestlé intends to go. The long-term approach, i.e. focusing beyond the traditional Food & Beverage market centres around offering high value-added products in rapidly expanding regions of the world. Therefore Nestlé is preparing to address the nutrition and consumer demands that will emerge as a result of future demographic challenges.
The full deployment of this strategy could lead to future disposals, and so, the present disappointment should really be considered a buying opportunity by investors.