It was reported that Nestl S.A. is more likely to sell its 30% stake in L'Oreal SA rather than attempt a takeover. One banker with knowledge of the situation said, We expect Nestle to sell off the L'Oreal stake to investors. We don't see the logic of combining food and cosmetics. Under a shareholders agreement, Nestl cannot acquire more L'Oreal shares until six months after the death of Bettencourt, but has the right of first refusal if the family wants to sell up. Nestl is free to sell its stake anytime.

L'Oreal SA reported sales of CNY 8.18 billion in China for 2009, up 17.7% from a year earlier. Boosted by Chinese customers' increasing demand for cosmetics.

Liliane Bettencourt, L'Oreal SAs biggest shareholder is not in discussions with Nestl S.A. to sell her 31% stake in L'Oreal to the firm, her lawyer, Georges Kiejman said. He denied the report that suggested Ms. Bettencourt was considering selling her stake. He noted that Ms. Bettencourt does not plan to change the shareholder pact that binds her stake to Nestl.