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Current Position:Home » News » Special Foods » Health Foods » Topic

Nestlé focuses on nutrition, health, wellness with L’Oréal deal

Zoom in font  Zoom out font Published: 2014-02-12  Views: 32
Core Tip: Nestlé and L’Oréal have announced a strategic transaction for both companies under which L’Oréal will buy 48.5 million of its own shares (8% of its share capital) from Nestlé.
Nestlé and L’Oréal have announced a strategic transaction for both companies under which L’Oréal will buy 48.5 million of its own shares (8% of its share capital) from Nestlé. The deal nets Nestlé €6.5 billion, and reduces its stake in L’Oréal from 29.4% to 23.29%. Nestlé said that it plans to use a portion of the funds to acquire the 50% of dermatology pharmaceuticals company Galderma that it does not own from L’Oréal, giving it 100% ownership.

In order to reflect the change of Nestlé’s stake in L’Oréal’s governance, the number of Nestlé representatives on L’Oréal’s Board of Directors will be adjusted from 3 to 2 directors

“With this proposed acquisition of 50% of Galderma, Nestlé will pursue its strategic development in Nutrition, Health, and Wellness, by expanding its activities to medical skin treatments,” said Peter Brabeck-Letmathe, chairman of Nestlé. “In this respect, Nestlé will create a new centre of activities in this area, through a new entity: Nestlé Skin Health SA. Galderma will be the foundation of this entity which will be run by Galderma’s management.”

“As a wholly owned subsidiary of Nestlé, Galderma will have all the required means for its development which will benefit to the company, its employees as well as all other stakeholders.

Following the decrease of its stake in L’Oréal, Nestlé will continue to support the development of L’Oréal as in the past 40 years. In this context, Nestlé will continue to act in concert with the Bettencourt Meyers family and the existing agreements, adapted to the new situation, will remain in place.”

“This transaction represents a very positive strategic move for L’Oréal, its employees and its shareholders,” said Jean-Paul Agon, chairman and chief executive officer of L'Oréal. “L’Oréal will focus exclusively on its Cosmetics business and its “Beauty for all” mission, its universalisation strategy and its ambition to win one billion new consumers.”

“L’Oréal will indeed benefit from a very significant and reinforced presence from the founding Bettencourt Meyers family, who will continue to fully support the company as it always did in the past.”

“L’Oréal will also continue to benefit from the support of Nestlé, which has always been a loyal and constructive shareholder.”

“Lastly, all of L’Oréal’s shareholders will benefit from this transaction with an accretive impact on the company’s earnings, resulting from the buyback and subsequent cancellation of L’Oréal shares held by Nestlé.”

 
 
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