Nestle, which has been selling its skin health business since September last year, has finally found a generous buyer.

It will be Europe's biggest deal so far this year. Nestle SA announced in recent days that it is in exclusive talks with a consortium led by Swedish private equity Firmer on EQT Partners AB and a wholly owned subsidiary of Abu Dhabi's sovereign wealth fund.

It will be sold to the latter's skin health division, Nestl? Skin Health S.A. for 10.2 billion Swiss francs ($69.8 billion). Founded in 1867, Nestle is now 152 years old. Nestle's revenue in 2018 will reach 91.4 billion Swiss francs (about 625.2 billion yuan). Its product variety exceeds many people's imagination.

Nestle currently has more than 2,000 brands, covering almost all of the food sectors such as coffee and tea, nutritional health products, dairy products and ice cream, pre-made and cooking products, pet food, chocolate and candy, bottled drinking water, etc. In that calculation, Nestle's skin health department was established and soon.

In 2014, Nestle, in response to the slowdown in its traditional food business, acquired a stake in the Galderma joint venture of L'Oreal in France and set up the skin health division Nestl? Health S.A. Since then, Nestle Skin Health has owned a range of pharmaceutical and consumer brands, including skin care brands Cetaphil and Proactive, prescription drug brand Epipox ointment duo, and therapeutic scum nasal ointment Soolantra.

: Cosmetic plastic surgery brand Wrinkle Filler Restylane (Bouric acid) and thin face needle Azzalure (Botox). Nestle's skin health division generated sales of 2.8 billion Swiss francs ($19.1 billion) last year, or about 3 percent of the company's total sales. In terms of revenue as a percentage of 2018, Nestle's largest sales business was beverages (including solids and liquids, mainly coffee), which accounted for 24% of sales. This was followed by the nutrition and health business, which contributed 18% of revenue. This was followed by the pet food business, which contributed about 14% of sales.

By category, coffee, pet food, infant nutrition increased twice as fast as other categories. Nestle's food business is growing fast today, thanks to strategic planning 30 years ago. From the 1980s, Helmut Maucher, Nestle's then-CEO, proposed a "specialization" strategy. He made it clear that Nestle must be more focused on its business and must stop unbridled diversification.

He decided to shift the company to more specialized food, and he plans to make the world's largest food company by creating a scale effect through a massive acquisition of food companies. Peter Brabeck Letmathe and Paul Bulcke, the latter two CEOs, have also continued their strategy. In the meantime, there is a special case worth mentioning: Nestle sold a 77 per cent stake in Alcon to Novartis in June 2007 for $39bn. At the time, Elcon was the world's largest and most profitable ophthalmology company, with 15,000 employees worldwide, with sales of $5.6 billion that year, making it the world's largest eye care company. It can be said that at this time Ercon in many people's view not only do not sell, but also the group's "cash tree."

This is Nestle's history of pain cut love to do "subtraction" of the classic case, which is behind Nestle's determination to focus on the food specialization strategy. Two years ago, When Mark Schneider, Nestle's current CEO, took office, he continued to pursue the "specialization" of the first three CEOs.

Nestle's business is entering a period of intense buying and selling. Since taking office, Schneider has focused on developing the food sector and has his own preferred segment.

He sold Nestle's U.S. confectionery business to Ferrero for $2.8 billion, closing its high-cost factory in Europe, selling its insurance business and focusing more on consumer health and high-growth.

In May 2018, Nestle further cemented Nestle's position as the world's largest coffee market share by acquiring Starbucks' retail and catering services business in addition to its stores for $7.1 billion. In an effort to accelerate Nestle's performance growth, Schneider divested its non-core business.

Focus On Pet Food, Coffee, Water and Nutritional Foods.

It is only a matter of time before Schneider sells non-core assets, the skin health division. Meanwhile, Daniel Loeb, Nestle's eighth-largest shareholder and a 1.25 per cent activist investor, has accelerated the sale of its skin health division.

In July last year, Daniel sent an open letter to Nestle's board and CEO Schneider accusing the world's largest food company of being too slow to transform and spin off underperforming businesses.

Who's EQT? News of Nestle's skin health division last September drew a crowd of companies and private equity funds. Bidders include Beersdorf (BEIG.DE), Allergan ,Allergan, Henkel, Johnson and Johnson , L'Oreal, Pfizer and Unilever;

Blackstone, KKR, Carlyle, CVC, EQT and Partners Group, among others. Among its many strong competitors, EQT is one of the vehicles for private equity investments by international investment giant Invest AB.

Yinrida is currently the largest industrial holding company in the Nordic region and a major shareholder in a number of top multinationals, including ABB, Ericsson and Electrolux. "We are very bullish on Nestle Skin Health," said Marcus Brennecke, a partner and co-head of private equity at EQT. The Future EQT Group will invite industry veterans to the Board of Directors to help the company fully develop the division.

EQT believes that the prescription drug sector has great potential for development. Since its inception 25 years ago, EQT has raised more than 60 billion euros, according to the data, with investors including the New York City Retirement Fund, the Texas and Danske Bank's A/S Teachers' Retirement Fund

Retirement System of Texas and Danske Bank A/S).

According to Pitchbook statistics, EQT Group's equity funds have been involved in 720 investments and mergers and acquisitions so far, with a focus on B2B, B2C, information technology and health care. After the deal, Nestle has moved away from non-core assets and is ready to develop its food business.

EQT not only took the opportunity to set foot on the health track, but also added a lot of money to its pre-IPO. EQT is understood to be exploring an initial public offering, and a successful acquisition of Nestle's skin health business will help push up the valuation of its IPO.