Swiss food giant Nestle on Tuesday said it was reducing its stake in French cosmetics group L'Oreal, selling shares worth €8.9 billion (£7.58bn).
Nestle said in a statement that 22.26 million of its L'Oreal shares were sold for €400 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."
