PARIS — Two major decisions involving L’Oréal have been reached.

The European Commission has given the green light to the French beauty giant’s proposed acquisition of The Body Shop, based in the U.K. The Commission said L’Oréal’s takeover of the ethical beauty retailer and manufacturer, announced in March, conformed to European Union merger regulations and would not hinder competition in the beauty industry.

“The transaction would not result in higher prices for cosmetics to the detriment of European consumers or otherwise significantly impede effective competition in the European Economic Area or any substantial part of it,” the commission said in a statement.

Its examination found that “the horizontal overlaps between the activities of The Body Shop and L’Oréal were limited, and that the combined entity would continue to face several strong competitors with significant market shares. Furthermore, given the limited size of The Body Shop stores’ network, the concentration would not deprive cosmetics manufacturers from access to a significant distribution channel nor deny competing retailers access to L’Oréal cosmetics products.”

Meanwhile, L’Oréal’s recommended cash offer for The Body Shop’s share capital was declared unconditional Thursday. Under the terms of the takeover deal, once L’Oréal possessed or had received valid acceptances for 90 percent of The Body Shop’s share capital, remaining shareholders would be obliged to sell their stakes. L’Oréal, which offered 300 pence per share, or a total of 652 million pounds, or $1.14 billion at current exchange, announced it has received valid acceptances for 184 million shares. Those, added to the 22.8 million already held by L’Oréal, totals around 207 million, representing 95 percent of The Body Shop’s ordinary share capital.

In another legal decision, a Paris court cleared L’Oréal’s Garnier brand and Laurent Dubois, its former manager, and acquitted it of accusations of racial discrimination in its hiring practices. As reported, L’Oréal and Adecco recruitment firm had been taken to court by French antiracism association S.O.S. Racisme on charges of racial discrimination during a recruitment drive for Fructis demonstrators in 2000. The charges against all parties were quashed. SOS Racisme announced Thursday it is appealing the decision.

This story first appeared in the June 5, 2006 issue of WWD. Subscribe Today.

In a statement Thursday, L’Oréal said, “This acquittal, which we were confident of obtaining, confirms that the allegations of racial discrimination against our Garnier subsidiary were unfounded. L’Oréal, which has acted in favor of diversity and against all forms of discrimination for many years, strongly believes it was unfairly implicated in this case.”

The firm reiterated “human respect is a fundamental principle of L’Oréal’s culture. We firmly believe that diversity is a critical asset, and we do not tolerate any form of racism or discrimination.”

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