Episkin, a subsidiary of LÂ’Oréal, today announces that it has acquired 81.2% of the share capital of SkinEthic from the companyÂ’s founder, Mr Rosdy. SkinEthic, based in Nice, was founded in 1992 and is listed on the Marché Libre of Euronext Paris. The company produces and markets reconstructed epidermis, skin and epithelia which can be used to carry out in vitro tests on the safety and effectiveness of many products (cosmetics, pharmaceuticals, chemicals, etc.). In 2004, SkinEthic made annual sales of € 1.47 million and a net loss of € 0.31 million. In 2005 SkinEthic sales totalled € 1.5 million. The annual results for 2005 will be made public by the end of April 2006, after the provisional accounts have been audited by the statutory auditors.

Episkin, which was founded in 1997, designs and develops complex cellular systems, including reconstructed epidermis and skin: systems which can be used to advance our understanding of the skin in an in vitro environment. The acquisition of SkinEthic will enable the company to combine EÂ’s and SkinEthicÂ’s expertise to create a top-level industrial facility capable of fulfilling the needs of the entire industry.

The block of 679,022 SkinEthic shares was acquired at the price of €6.92 per sharEpiskin.

At the same time, Episkin acquired 24,245 SkinEthic shares from the companyÂ’s employees (representing 2.9% of the share capital), on the same terms. Following these transactions, Episkin therefore holds 84.1% of SkinEthicÂ’s share capital.

Episkin will be making an offer to all SkinEthicÂ’s minority shareholders to purchase all the shares they hold at the price of €6.92 per share, with the undertaking from Episkin that SkinEthic will not pay out a dividend for fiscal 2005. Under the terms of this cash offer, Exane BNP Paribas, acting on EÂ’s behalf, will acquire on the market at a unit price of €6.92 all the SkinEthic shares made available between 28 February 2006 and 12 May 2006 inclusivEpiskin.

For purposes of information, the offer price represents premiums of 7.8% and 8.1% on the average SkinEthic share price recorded during the last 60 and 120 trading days on the Marché Libre respectively. Similarly, the offer price represents a premium of 15.3% on the share price of €6 when SkinEthic was admitted to the Marché Libre in July 2004.

Episkin has stated its intention to request the delisting of SkinEthic shares from Euronext’s Marché Libre as soon as the conditions for doing so are fulfilled. In addition, SkinEthic will relinquish its status of issuer making a public offer of securities as soon as the conditions laid down in Article 215-1 of the General Regulations of the AMF (Autorité des Marchés Financiers) are fulfilled.
"This news release does not constitute an offer to sell, or a solicitation of an offer to buy, L’Oréal shares. If you wish to obtain more comprehensive information about L’Oréal, please refer to the public documents registered in France with the Autorité des Marchés Financiers.
This news release may contain some forward-looking statements. Although the Company considers that these statements are based on reasonable hypotheses at the date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual results to differ materially from those indicated or projected in these statements."

Contacts at L'OREAL

Shareholders and market authorities
Mr Jean-Régis CAROF
Tel. : +33.1.47.56.83.02
http://www.loreal-finance.com

Analysts and institutional investors
Mrs Caroline MILLOT
Tel. : +33.1.47.56.86.82
Fax : +33.1.47.56.80.02

Journalists
Mr Mike RUMSBY
Tel. : +33.1.47.56.76.71
http://www.loreal.com