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L'Oreal to repurchase €6.5B worth of shares from Nestle

  • L'Oreal (LRLCF) has agreed to acquire 8% of its capital from Nestle (NSRGY) for €6.5B ($9B) in a deal that will reduce the latter's holding in the cosmetics group to 23.29% from 29.4%.
  • L'Oreal will pay €3.4B of the total sum in cash and the rest by handing over 50% of its stake in Swiss dermatology pharmaceuticals company Galderma, a 50-50 joint venture between Nestle and the French firm. The latter deal has an enterprise value of €3.1B.
  • Nestle intends to use the cash from the deal to repurchase stock and it is creating a new unit called Nestle Skin Health, using Galderma as the basis.
  • L'Oreal plans to cancel all the shares that it is buying back. Following the transaction, the Bettencourt Meyers family's holding in the company will rise to 33.31% from 30.6%. (PR)
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