L’Oreal Heiress, Daughter End $1.3 Billion Gifts Fight
Bettencourt and daughter Francoise Bettencourt-Meyers announced the settlement today without disclosing details. The legal battle grew from a family dispute into a political scandal after recordings by Bettencourt’s former butler sparked probes into President Nicolas Sarkozy’s 2007 election bid and influence-peddling allegations against former Labor Minister Eric Woerth.
“On the political front, the damage has already been done, you can’t put the pieces back together again,” Laurent Dubois, a professor at Paris’s Institute of Political Studies, said in a telephone interview. “In public opinion, the affair will always be the symbol of the differences between the aristocrats in their chateaux and the rest of society.”
The dispute shined a spotlight on the private life of one of France’s richest and most powerful families. Bettencourt is the daughter of the founder of L’Oreal, the world’s biggest cosmetics company, and remains its biggest shareholder. As of March 1, Bettencourt was worth 15.6 billion euros, according to her spokeswoman. Forbes Magazine rated her the 17th richest woman in the world this year.
‘Embrace the Future’
The settlement “meets my wish to see the family united,” Bettencourt, 88, said in the statement. “We can now embrace the future together, for the good of all of us and for L’Oreal, which is so much a part of my life.”
“This favorable development in their relationship is also very positive for our group and its employees, given that the family has also expressed its strong and joint commitment to L’Oreal,” Jean-Paul Agon, L’Oreal’s chief executive officer, said in a statement to company employees about the settlement.
In December 2007, after Bettencourt’s husband died, Bettencourt-Meyers said a servant approached her saying she’d overheard the mother discussing the adoption of her friend, photographer Francois-Marie Banier. Bettencourt-Meyers filed a criminal complaint saying Banier had manipulated her mother into awarding him gifts. When that complaint was dropped, she pursued the case as a private prosecution.
The dispute provoked questions as to whether the Bettencourt stake could shift hands. The family has a mutual accord with Nestle SA, L’Oreal’s second-biggest holder, giving each a right of first refusal should the other decide to sell.
The settlement reduces the chance Nestle will take over L’Oreal, said Jon Cox, an analyst at Kepler Capital Markets in Zurich. “The family is again in harmony and there is less need, if there ever was one, for the family to dispose of the stake where Nestle had the right of first refusal,” he said.
L’Oreal started 101 years ago as a small hair-dye maker, and owes its name and origins to Aureole, a nontoxic hair colorant Bettencourt’s father Eugene Schueller developed in 1907 for Paris hair salons. L’Oreal terminated a 10-year consulting contract with Banier in September, one year ahead of schedule, after investors in the cosmetics company filed a complaint saying it was a misuse of company funds.
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