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L'Oréal Family Settles Dispute
Posted: December 7, 2010
According to an article in the Wall Street Journal by David Gauthier-Villars, L’Oréal heiress Liliane Bettencourt and her daughter Françoise Bettencourt-Meyers have reportedly resolved their differences, ending a series of lawsuits that could have jeopardized their control of the cosmetics giant. In a joint statement, the pair said they are looking to reinforce the family management of their 31% stake, valued at €15.7 billion ($21 billion), in L’Oréal.
The agreement came amid speculation that L’Oréal’s second largest shareholder, Nestlé SA of Switzerland, would possibly use the family dispute to seize control of the company. Nestle has said it was bound by an agreement not to increase its 29% stake in L’Oréal until six months after the death of Bettencourt.
The family dispute traces back to a complaint made three years ago by Bettencourt-Meyers. Bettencourt-Meyers accused photographer François-Marie Banier, a friend of Bettencourt, of having abused Bettencourt’s mental weakness to get gifts from her. Banier has acknowledged receiving the gifts, but denies having abused Bettencourt’s trust.
The complaint led to a series of legal actions: Bettencourt sued her daughter for mental harassment and Banier accused Bettencourt-Meyers of having suborned a witness. Through their lawyers, Bettencourt, her daughter and Banier have all said the complaints will be withdrawn.
Additionally, to bolster her family's control of L’Oréal, Bettencourt and her daughter agreed to appoint Bettencourt-Meyers’s two sons to the board of Tethys, their holding company. According to a spokeswoman for Bettencourt, Patrice de Maistre, who is not a member of the Bettencourt family, will step down as Tethys chief executive by the end of the year.