Nestlé Takes Stake in L’Oréal

GENEVA - Feb 4/04 - SNS -- Nestlé S.A. is taking a direct stake in the cosmetics company L’Oréal as a result of a merger between Gesparal and L’Oréal.

Nestlé’s owns 49% of Gesparal and under the merger agreement this will be converted into a 26.4% direct holding in L’Oréal. The Bettencourt family, which owns the remaining 51% of Gesparal, and Nestlé have agreed not to increase their respective ownership of L’Oréal for at least three years. They have also granted one another a mutual right of first refusal for their L’Oréal shares for a period of 10 years.

Rainer E. Gut, Chairman of Nestlé S.A., said: "I am very pleased that we found an agreement that safeguards the interests of all parties concerned. Nestlé shareholders will benefit from a more transparent valuation of the L’Oréal stake which remains an important strategic investment for Nestlé."

The new agreement announced today cancels and replaces the contracts signed earlier between the Bettencourt family and Nestlé, including Nestlé’s obligation to purchase all or part of the family’s Gesparal shares at its request.

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