L'Oreal's Sanofi stake a 'reserve' for takeovers, says Jean-Paul Agon, CEO

FRANKFURT: French cosmetics group L'Oreal is ready to cash in on its stake in drugmaker Sanofi should it need the money to fund a larger takeover, L'Oreal's Chief Executive Jean-Paul Agon told a German newspaper.

"We have a stake of almost 9 per cent in pharma group Sanofi. That gives us a nice reserve in case a good opportunity arises," Agon was quoted as saying in an interview with Die Welt newspaper published on Tuesday.

He added L'Oreal would not shrink from a larger takeover, but such a deal would have to make sense and be affordable.

L'Oreal in February agreed a deal to buy back an 8 per cent stake in its own capital from Swiss consumer goods group Nestle, giving rise to speculation it may look to sell its stake in Sanofi to fund that deal. However, Agon said at the time that L'Oreal was "very happy" with its role as a core shareholder in Sanofi.

The CEO also told Die Welt that L'Oreal could envisage setting up a research and development centre in Africa over the next three years, depending on sales growth in that market.