Cosmetics giant L’Oreal SA is selling a €3 billion ($3.1 billion) stake in Sanofi back to the French drugmaker, cashing in part of its holding after Sanofi’s shares outperformed the market over the past year.
L’Oreal is selling 29.6 million shares at €101.50 each, the companies said in statements Monday. After the sale, L’Oréal will own 7.2% of Sanofi’s share capital and 13.1% of its voting rights.
The price is a 2.8% discount to where Sanofi shares closed Friday.
The sale will “optimize” L’Oreal’s balance sheet following recent acquisitions and further diversify its financing sources, the maker of shampoo and cosmetic brands like Garnier and Lancome said. L’Oreal has been acquisitive in recent years, buying notably soap maker Aesop in a transaction worth $2.6 billion.
The repurchase is part of Sanofi’s share buyback program announced last week, the drugmaker said.
Sanofi shares in Paris have gained almost 20% over the past year while shares in the beauty group have fallen by around the same amount amid a demand downturn in China. L’Oreal will report full year earnings on Thursday.