Nestlé's participation in L'Oréal has been beneficial to both companies for many years. L'Oréal knows that it has the full support of its two biggest shareholders, Nestlé and the Bettencourt family, whilst Nestlé has benefited from the significant increase in the value of its investment over the long term. Moreover, Nestlé and L'Oréal have benefited from their cooperation through two successful joint ventures – Galderma and Laboratoires innéov as well as joint efforts in research.
The terms of the agreement between Nestlé and the Bettencourt family are public. The principal terms are that the Parties cannot increase their stake in L’Oréal during the lifetime of Mrs. Liliane Bettencourt and six months after that. Since 29 April 2009, the Parties have been free to sell their shares, each of them having conceded the other a first right of refusal until 28 April 2014. After that date, the Parties are free to offer the shares to any third party.
Following the announcement of the sale for cancellation of 48.5 million L’Oréal shares to L’Oréal on 11 February 2014 and subject to completion of the transaction, Nestlé’s ownership in L’Oréal will decrease from 29.4% to 23.29%. The Bettencourt family ownership will increase from 30.6% to 33.31%. The number of Nestlé representatives on the Board of Directors of L’Oréal will be adjusted from 3 to 2. Otherwise the terms of the agreement between Nestlé and the Bettencourt family remain unchanged. The Parties will continue to act in concert with respect to L’Oréal for the remaining duration of the shareholders’ agreement, i.e. during the lifetime of Mrs. Liliane Bettencourt and six months after that.
We continue to consider our shareholding in L’Oréal as substantial and long-term. It is very important to us, both in financial and strategic terms. The latest announcement should in no way be interpreted as the beginning of Nestlé’s withdrawal from L’Oréal.
Read the press release - Feb 11, 2014: Strategic Transaction Approved by Boards of Nestlé and L’Oréal
Read the terms of the agreement (pdf, 563 Kb) and the recent amendment on the Autorité des Marchés Financiers website
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