What's going on?

The world�s largest public food company, Nestl�, on Thursday revealed it was in exclusive negotiations with a group of investors, including a private equity firm, to sell its skincare business for a smooth $10 billion.

What does this mean?

Although last quarter�s results showed the tide beginning to turn, many consumer staples giants (including Nestl�) have spent the last few years struggling to raise prices thanks to low inflation. Instead, they�ve turned to skin-deep cost-cutting measures in order to grow profits.

There�s been speculation for months that Nestl� would sell or separate off its less-than-glowing skin health business in a bid to focus on faster-growing areas like petcare and infant nutrition. Now, the company�s confirmed its latest streamlining wheeze is flogging the unit � which it took full control of just four years ago � to private investors.

Why should I care?

The bigger picture: Activists keep active.

Activist investors have had a lot to say for themselves recently, and Nestl� is no exception. Last year, a prominent troublemaker amassed a $3 billion stake in the company before publishing a lengthy criticism of its strategy. As well as the sale of Nestl�s own skincare business, he also encouraged the company to sell its 23% stake in cosmetics giant L�Oreal � which could perhaps enable it to make a blockbuster acquisition elsewhere. Coffee may be one area of particular interest; shareholder activism, indeed, was behind the UK�s Whitbread selling its Costa Coffee chain to Coca-Cola in August.

For markets: You�ve got to cut to grow.

Selling its skincare unit to private buyers may be an attractive solution for Nestl�, given that it avoids the potential anti-competition concerns involved in selling to rivals (just ask Walmart). After selling its US confectionery business in January, news in February that Nestl� was reassessing its cold cuts counter appeared to reinforce the company�s commitment to faster-growing divisions (like plant-based burgers). If successful, that could spell higher sales and profit in the future � and a more activist-pleasing share price.