A New Agreement between the majority Shareholders of LÂ’OREAL
Mrs. BETTENCOURT remains the largest shareholder of LÂ’OREAL


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A Press Conference by Lindsay Owen-Jones, CEO of L’OREAL will be held Wednesday, February 4th at 12.00(noon) Paris Time at L’Oréal Offices 41 rue Martre, Clichy
Live Internet broadcast of Mr. Lindsay Owen-Jones's speech on www.loreal-finance.com and by phone at +44 208 515 23 23

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In a release distributed today, the Holding Company Gesparal has announced that Mrs. Bettencourt and her family, and Nestlé have decided to further develop the agreement which they had for over 30 years. This release is available on www.loreal.com.

The new agreement includes:
  • The merger and absorption of Gesparal by LÂ’Oréal;

  • The elimination of double voting rights;

  • The continuation of the respective positions of the Bettencourt family and Nestlé in LÂ’Oréal capital;

  • A further development of LÂ’OréalÂ’s corporate governance.

The merger of Gesparal and L’Oréal and the elimination of double voting rights that will be submitted to shareholders for their approval at the Shareholders Meeting planned for April 29, 2004 will have no effect either on the financial structure or on the results of L’Oréal, as Gesparal owns only L’Oréal shares and has no debt.

When this transaction is completed, the Bettencourt family and Nestlé will become direct shareholders of L’Oréal with, respectively, 27.5 % and 26.4 % of the capital and, respectively, 28.6% and 27.5 % in voting rights.

The Board of Directors of L’Oréal will be asked to create a Committee for Strategy and Implementation made up of 6 members: the CEO of L’Oréal who will chair the Committee, 2 members will be amongst the Board members representing the Bettencourt family, 2 others amongst the members representing Nestlé, and one will be an independent Board member.

Lindsay Owen-Jones, CEO of L’Oréal declared:

“I am delighted by this agreement which is extremely favourable to the Company, to its employees, to its clients and to all of its shareholders.

The clarification of the shareholding structure and the improved Corporate Governance will enhance transparency and simplicity.

The renewed stability of the shareholding structure will continue to support our long term strategy for growth and profitability.

We appreciate the support and confidence of all of our shareholders”.

The Gesparal news release is attached to this document.