Swiss food group Nestle originally acquired a 26.4 per cent stake in L’Oreal in 2004, which has since risen to almost 30 per cent.
The original deal granted Nestle the right to sell its shares from the end of April this year sparking speculation in recent months that the company would either mount a bid to acquire L’Oreal or sell its existing stake.
Nestle and L'Oreal to maintain the status quo
In the end neither path was taken. Nestle and the Bettencourt family, who jointly hold about a 60 per cent stake in L’Oreal, released a statement late yesterday afternoon saying the status quo would be maintained.
In the joint statement the two parties said: “The Bettencourt family and the Nestlé company will continue on acting in concert towards the L'Oreal company beyond 29 April 2009.”
No further details concerning the future of the Nestle stake in L’Oreal were revealed.
Nestle management vague on long term plans
Despite relentless questioning, Nestle management has always been vague about its long term plans for L’Oreal.
However, speculation about the importance of the April clause in the original agreement was fueled two years ago when Chairman Peter Brabeck said 2009 would be a very important year for the L’Oreal relationship.
There is very little overlap between Nestle and L’Oreal although opportunities on the boundary between cosmetics and food are being explored through the joint venture Laboratoires INNEOV.