Mrs. Bettencourt’s Exit Brings Obscurity in Future of Nestlé-L’Oréal Relationship

Nestlé

The Swiss food & beverage maker is likely to be left with a sizeable stake in the French cosmetics giant – L’Oréal, after the latter’s founding kin – the Bettencourt family – recently terminated an agreement, which was penned in the mid-70s. Uncertainty has clouded the top minds of Nestlé, as its outgoing chairman recently announced that he cannot predict how the company’s 23% stake in L’Oréal will be helpful in the future.

At Nestlé’s annual general meeting, the company’s current chairman Peter Brabeck-Letmathe, addressed a shareholder’s query by saying – “What will happen after Mrs. Bettencourt, very unfortunately, leaves use one day? Who knows what can happen in five or ten years, we certainly wish her a long and healthy life.”

Brabeck’s acute statement reeks of growing ambiguity between the Nestlé-L’Oréal shareholding accords. According to the report, Liliane Bettencourt, the 94-year old French heiress has stepped down as one of the principal shareholder of L’Oréal. Being one of the richest women in the world, Mrs. Bettencourt and her family were the founding members of L’Oréal S.A. Since its inception in 1909, L’Oréal has now become the largest cosmetic company in the world. Under the hundred-year hierarchical guidance of the Bettencourt family, the company has expanded its global clout in the cosmetics & beauty products industry, holding patents to number of ground-breaking formulations for skin care & beauty care products.

The alleged agreement stipulates that both parties, Nestlé and the Bettencourt family, cannot increase their stake in L’Oréal during the lifetime of Liliane Bettencourt, and six months after her death. At present, the Swiss dairy giant is one of the largest stakeholder of L’Oréal. With the voluntary exit of the Bettencourt family through termination of this agreement, Nestlé will have an option of increasing its L’Oréal stake. But, Nestlé’s top convener, Brabeck, is not sure if the company will view this as a window of opportunity or as a curtain call.

Meanwhile, at L’Oréal….

On April 4, the Institut Langevin and the Denis Diderot University in Paris collaborated with Mechanobiology Institute, Singapore and the Institute of Medical Biology in Singapore to help L’Oréal’s Research & Innovation (R&I) launch a first-ever skin device that has unique massaging features that also deliver anti-aging effects on wrinkles and contours of the face, head, lips and neck. According to the reports, L’Oréal has used mechanobilogy discoveries to boost the efficacy of its anti-aging products. The unique massaging device developed during this collaboration was devised around the notion of how providing mechanical stimuli to biological tissues can modify their properties in terms of strength, dermal-epidermal junctions, and production of extracellular matrix. The L’Oréal R&I in the US used the research and trial studies from these two Singaporean medical institutes to develop a three-point head massaging device with maximum stimulation capacity. Clinical trials confirmed that the device does modify skin aging of the user, and particular impacts the elasticity and firmness of skin around the edges of the face. The advent of this cutting-edge product might give the cosmetics company another top-grossing product line.

About Suyog Keluskar 51 Articles
Suyog Keluskar is an experienced Market Research, Customer Insights & Consulting professional, covering latest industry and market updates on Electronics, Semiconductor and ICT domain. With over ten years of experience in business/market research, Suyog delivers customer-centric assignments in market-entry, market expansion, partner identification, competition analysis, market sizing, industry insights and customer intelligence studies. When Suyog is not busy unraveling the consumer mind or unearthing market potential he can be found traveling the road less traveled with a fascinating book on contemporary history in his hand. An avid cricket fan, music lover and you will also find him discussing politics with his friends and peers more often.

Be the first to comment

Leave a Reply

Your email address will not be published.


*