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L'Oréal to buy 8% of its shares from Nestlé L'Oréal to buy 8% of its shares from Nestlé
(about 5 hours later)
L'Oréal will buy 8% of its capital for €6.5bn (£5.4bn) from Swiss consumer goods group Nestlé, boosting the French cosmetics group's earnings per share by more than 5%.L'Oréal will buy 8% of its capital for €6.5bn (£5.4bn) from Swiss consumer goods group Nestlé, boosting the French cosmetics group's earnings per share by more than 5%.
The deal will cut Nestlé's stake in L'Oréal to 23.29% from 29.4% while the Bettencourt Meyers family's stake in L'Oréal will increase from 30.6% to 33.31%, the company said in a statement.The deal will cut Nestlé's stake in L'Oréal to 23.29% from 29.4% while the Bettencourt Meyers family's stake in L'Oréal will increase from 30.6% to 33.31%, the company said in a statement.
The transaction will be partially funded through the sale by L'Oréal to Nestlé of its 50% stake in Swiss dermatology pharmaceuticals company Galderma – a 50-50 joint venture between L'Oréal and Nestlé – for an enterprise value of €3.1bn (€2.6bn of equity value), paid by Nestlé in L'Oréal shares (21.2m shares).The transaction will be partially funded through the sale by L'Oréal to Nestlé of its 50% stake in Swiss dermatology pharmaceuticals company Galderma – a 50-50 joint venture between L'Oréal and Nestlé – for an enterprise value of €3.1bn (€2.6bn of equity value), paid by Nestlé in L'Oréal shares (21.2m shares).
The remainder, corresponding to 27.3m L'Oréal shares held by Nestlé, will be paid in cash for €3.4bn. In a separate statement, Nestlé said it would use the cash proceeds to launch a share buyback, without disclosing details.The remainder, corresponding to 27.3m L'Oréal shares held by Nestlé, will be paid in cash for €3.4bn. In a separate statement, Nestlé said it would use the cash proceeds to launch a share buyback, without disclosing details.
The price per L'Oréal share retained for this transaction is €124.48, corresponding to the average of its closing prices between Nov. 11, 2013 and Feb. 10, 2014. The price per L'Oréal share retained for this transaction is €124.48, corresponding to the average of its closing prices between 11 November 2013 and 10 February 2014.
All the shares bought back by L'Oréal will be cancelled.All the shares bought back by L'Oréal will be cancelled.
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 cut from three to two directors.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 cut from three to two directors.