L’Oreal chairman casts doubt on Nestlé take-over
“There is no co-operation on the ground in the field between the two companies,” Agon said in an interview he gave to international news agency Bloomberg at the end of last week in Paris.
Speculation over what Nestlé plans to do with its 30 per cent stake in L’Oréal has been heightened since it announced earlier this month that it would decide what to do with it after 2014, when a ten year moratorium on trading to a third party comes to an end.
Pointing to the fact that L’Oréal and Nestlé have a limited shared distribution platform worldwide, Agon said in the interview: “I don’t see any possible synergies.”
Limited shared distribution platforms
L’Oréal’s distribution platform is mainly based on dedicated personal care and beauty retail outlets, and is estimated to have only 30 percent of its distribution in food stores where Nestlé products are also likely to be stocked.
Agon’s comments reflect those of L’Oréal heiress Liliane Bettencourt, who last week also stated her belief that Nestlé posed no threat to either the company’s independence or the way the business will be run.
Speaking to French daily Le Figaro, Bettencourt was keen to move on from the problems surrounding family disputes with her daughter, and focus fully on L’Oréal and its business.
“I wish to continue my tenure as director, I am the founder’s daughter, I am L’Oreal’s spirit and the main shareholder,” she said.
Analysts' opnions remain divided
Further doubts over a Nestlé takeover bid have been expressed by market experts after the food giant sold off its majority stake in eye care business Alcon Inc for around €20bn last year, in a deal that sharpened the company’s focus on the food industry.
On the other side of the fence, some experts believe that this sale strengthened Nestlé’s war chest, giving it sufficient funds to invest in a majority stake in the L’Oréal business, if executives see fit.
Currently the L’Oréal heiress Liliane Bettencourt owns a 31 per cent stake in the business, which is estimated to be worth in the region of €15bn.
