Nestle sells shares in L'Oreal for 8.9 billion euros

Swiss food giant Nestle on Tuesday said it was reducing its stake in French cosmetics group L'Oreal, selling shares worth 8.9 billion euros ($10 billion).

Nestle said in a statement that 22.26 million of its L'Oreal shares were sold for 400 euros each, adding it "remains fully supportive" of the French company's "value creation strategy".

L'Oreal said in a separate statement that it would cancel the shares, which represent four percent of its capital.

The French group's shareholders will see their shareholdings increase due to the buy-back, L'Oreal said.

It added that the stake of L'Oreal's Bettencourt Meyers family shareholders will rise from 33.3 percent to 34.7 percent.

"The share buyback will be financed in a balanced manner by the group's available cash on the one hand, and new debt on the other," the L'Oreal statement said.

L'Oreal chairman Jean-Paul Agon said the move "constitutes a new strategic milestone in reinforcing the shareholder stability of L'Oreal around the Bettencourt Meyers founding family and Nestle."