PARIS — The suspense over what Nestlé might do with its 29.3 percent stake in L’Oréal was heightened Wednesday when the Swiss food giant’s chairman told a local newspaper that Nestlé would not extend its 10-year purchase contract with France’s Bettencourt family, which owns 30.5 percent of the beauty giant.
This story first appeared in the August 29, 2013 issue of WWD. Subscribe Today.
Peter Brabeck-Letmathe added that Nestlé wishes to keep all its options open, including the status quo.
Asked for comment on Brabeck-Letmathe’s remarks, Meike Schmidt, Nestlé SA’s corporate spokesperson, said that its holding 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 long-term value of its investment.“
He noted that the agreement stipulates that neither Nestlé nor L’Oréal can increase their stake in L’Oréal during the lifetime of Liliane Bettencourt, now 90, and six months after that. “As of April 29, 2009, the parties are free to sell their shares, each of them having conceded the other a first right of refusal until April 29, 2014. After that date, the parties are free to offer the shares to any third party,” he said.
He added that the Nestlé stake remains “an important topic” and that the firm would “continue to take a long-term strategic view in shareholders’ best interest.”
L’Oréal had no comment on the development.
Responding to media reports over the summer, the Bettencourt family recently said it had no plans to sell its L’Oréal stake.