In its annual general meeting for shareholders, held in Paris yesterday, L’Oreal chairman Lindsey Owen-Jones said: “We are in no hurry to get out of Sanofi.”
Although Sanofi-aventis has limited coverage of the personal care market, it recently expanded its presence with the acquisition of the US-based company Chattem.
Sanofi expands in personal care
The deal was sealed back in February, when Sanofi-aventis paid $1.9bn (€1.3bn) for all the outstanding shares in the US-based health and consumer player, which produces a range of specialised toiletry and personal care products, mainly for the North American market.
Analysts have been speculating that L’Oreal might want to sell its share in the company, valued in excess of €6bn in today’s market, in an effort to increase its available funds for future acquisitions.
In the shareholders meeting, the company said that it currently had approximately €10bn of available funds at the moment that could be channeled into merger and acquisition activities.
No attractive acquisitions right now
However, the market currently remains relatively subdued, and Owen-Jones stated in the meeting that there were currently very few attractive propositions on the market that the company is interested in.
Nevertheless, L’Oreal USA recently announced the signing of an agreement to acquire nail care brand Essie Cosmetics in order to increase its share in the nail color and care market.
The nail care category is currently the fastest growing mass market category in the US, according to L’Oreal, and the acquisition of Essie therefore allows the company to place greater focus on this lucrative segment.
Speculation over Nestle stake
Back in March speculation that Nestle was looking to up its investment in L’Oreal to a majority stake pushed L’Oreal share prices to a two year high.
An article in the UK newspaper The Daily Telegraph claimed that Nestle was in talks to try and buy up the 31 per cent stake Lilliane Bettencourt still owns in the business, but L’Oreal refused to make any comment and there has been no further speculation.