l'Oreal may bid for Beiersdorf

Nivea products account for more than half of Beiersdorf's annual turnover

LONDON, England -- Cosmetics giant L'Oreal may be planning a 13 billion euro ($12 billion) bid for German rival Beiersdorf, maker of Nivea skin care products.

The UK's Independent on Sunday reported L'Oreal (POR), the French group best known for its Lancome skin creams, will announce a takeover bid for Beiersdorf within the next few weeks. Both companies have declined to comment on the report.

Beiersdorf has been the centre of takeover speculation since Allianz (FALV), Germany's biggest insurer, increased its stake to 43.6 percent in 2001 and indicated it was interested in selling the company.

German retailer Tchibo Holding, which owns 30 percent of Beiersdorf, has been rumoured as a likely suitor along with L'Oreal. Tchibo recently sold its 76.3 percent stake in tobacco company Reemtsma to Imperial Tobacco and is believed to be anxious to use the cash from that deal for new acquisitions.

Beiersdorf, which has a market capitalisation of 10.5 billion euros, is seen as an attractive acquisition. The group had turnover of 4.5 billion euros in 2001, more than half of that coming from sales of Nivea products.

However, industry sources are skeptical that a takeover bid is imminent.

"Where on earth do they (The Independent on Sunday) get it from? This is nothing I've heard of,'' a source told Reuters.

Another source said "you would be mistaken to assume there is a bid out there to be launched," adding: "These guys talk from time to time but as far as I'm aware they have never talked about anything more tangible than industry chit-chat...nothing of significance.''

Beiersdorf shares jumped 7.9 percent to 135.71 euros in midday Frankfurt trading on Monday, while L'Oreal was up 0.5 percent to 82.40 euros in Paris.