Nestle weighs L'Oreal stake sale

By IVCPOST Staff Reporter

Sep 09, 2013 10:58 PM EDT

Nestle SA had been looking at its option on whether the L'Oreal SA stake sale would be worth it, said an ET report. This was ahead of the expiration of its restrictions on selling 29.4% stake in the French cosmetics maker. Nestle said that it would keep all options open. This brought the possibility of the company to increase its holdings in L'Oreal, said Natixis analyst Pierre Tegner.

Tegner said that, if Nestle would increase its stake in L'Oreal, it would create "the indisputable worldwide leader in consumer staples and would be a good way of leveraging this very profitable investment."  However, most analysts doubted if Nestle would indeed raised its stake in Paris-based L'Oreal.

A raise of holding in L'Oreal would also allow Nestle to look beyond the food and beverages segment which had slowed down in the past year.  Last month, L'Oreal reported an estimate beating the 7.7% increase in the first half of its earnings and displayed stronger sales in emerging markets.

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