PARIS: L’Oreal signalled its readiness to buy Nestle’s 23 percent stake in the world’s biggest cosmetics firm on Friday, which along with strong results lifted the French company’s shares.
L’Oreal said it could finance a purchase of the holding, which is now worth around €22.3 billion ($27.4 billion), with cash, by selling its stake in French pharmaceutical group Sanofi or through borrowing.
“If Nestle one day wants to sell, we are ready,” Chairman and Chief Executive Jean-Paul Agon said after L’Oreal released fourth-quarter earnings.
Billionaire Liliane Bettencourt’s death in September has focused attention on how L’Oreal’s founding family and its major shareholder Swiss food group Nestle would manage their stakes.
Investor Daniel Loeb, founder of hedge fund Third Point, has pushed for Nestle to sell its L’Oreal stake among his demands for the Swiss firm to speed a strategy overhaul.
“We have €1.8 billion in cash, we have the Sanofi stake. We are also a very serious and loyal and active shareholder in Sanofi, but in case we will be ready and I’m sure if it was not enough, we have many love letters from banks that have said that they would love to lend us some money.” he added.
Nestle and Sanofi declined to comment.
Shares in L’Oreal, whose brand ambassadors include Helen Mirren, Eva Longoria and Blake Lively, were up 2.4 percent in early trade, among the top gainers on France’s blue-chip CAC-40 index. Nestle shares were up 1.1 percent, while Sanofi was 0.7 percent lower.
“Scarcely a surprise, but this may excite some: An acquisition of the stake by L’Oreal, part-funded by a sale of its own Sanofi stake would be circa 10 percent accretive,” Investec Securities analysts said in a note.
At today’s stock price, L’Oreal’s 9 percent stake in Sanofi is worth more than €7 billion, according to Reuters data.
L’Oreal entered the pharmaceuticals business in 1973 with the purchase of Synthelabo. This was later merged with Elf Aquitaine’s drugs business in the late 1990s, with L’Oreal retaining a stake in the enlarged Sanofi group.
“We see this as no change to the status quo from a L’Oreal perspective. Nor do we expect an imminent about-turn from Nestle, which reiterated its commitment to the L’Oreal holding in September,” Barclays analysts wrote.
L’Oreal ready to buy Nestle stake in cosmetics leader
L’Oreal ready to buy Nestle stake in cosmetics leader
Silver crosses $77 mark while gold, platinum stretch record highs
- Spot silver touched an all-time high of $77.40 earlier today, marking a 167% year-to-date surge driven by supply deficits
- Spot platinum rose 9.8% to $2,437.72 per ounce, while palladium surged 14 percent to $1,927.81, its highest level in over 3 years
Silver breached the $77 mark for the first time on Friday, while gold and platinum hit record highs, buoyed by expectations of US Federal Reserve rate cuts and geopolitical tensions that fueled safe-haven demand.
Spot silver jumped 7.5% to $77.30 per ounce, as of 1:53 p.m. ET (1853 GMT), after touching an all-time high of $77.40 earlier today, marking a 167% year-to-date surge driven by supply deficits, its designation as a US critical mineral, and strong investment inflows.
Spot gold was up 1.2% at $4,531.41 per ounce, after hitting a record $4,549.71 earlier. US gold futures for February delivery settled 1.1% higher at $4,552.70.
“Expectations for further Fed easing in 2026, a weak dollar and heightened geopolitical tensions are driving volatility in thin markets. While there is some risk of profit-taking before the year-end, the trend remains strong,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Markets are anticipating two rate cuts in 2026, with the first likely around mid-year amid speculation that US President Donald Trump could name a dovish Fed chair, reinforcing expectations for a more accommodative monetary stance.
The US dollar index was on track for a weekly decline, enhancing the appeal of dollar-priced gold for overseas buyers.
On the geopolitical front, the US carried out airstrikes against Daesh militants in northwest Nigeria, Trump said on Thursday.
“$80 in silver is within reach by year-end. For gold, the next objective is $4,686.61, with $5,000 likely in the first half of next year,” Grant added.
Gold remains poised for its strongest annual gain since 1979, underpinned by Fed policy easing, central bank purchases, ETF inflows, and ongoing de-dollarization trends.
On the physical demand side, gold discounts in India widened to their highest in more than six months this week as a relentless price rally curbed retail buying, while discounts in China narrowed sharply from last week’s five-year highs.
Elsewhere, spot platinum rose 9.8% to $2,437.72 per ounce, having earlier hit a record high of $2,454.12 while palladium surged 14% to $1,927.81, its highest level in more than three years.
All precious metals logged weekly gains, with platinum recording its strongest weekly rise on record.
