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L'Oreal explores unloading chemical-related liabilities, WSJ reports - Finance news and analysis from Global Banking & Finance Review
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L'Oreal explores unloading chemical-related liabilities, WSJ reports

Published by Global Banking & Finance Review

Posted on October 6, 2026

3 min read

· Last updated: October 6, 2026

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L'Oreal Reviews Corporate Options Amid Rising Cosmetic Chemical Liabilities

L'Oreal Faces Growing Legal and Financial Challenges Over Cosmetic Ingredients

Engagement of Restructuring Advisers

Oct 5 (Reuters) - L'Oreal has engaged restructuring advisers to explore options for rising US legal liabilities linked to its use of talc and other chemical ingredients in some of its cosmetic products, the Wall Street Journal reported on Monday.

The cosmetics maker's US unit is working with restructuring counsel Weil Gotshal & Manges and investment bank Ducera Partners to address lawsuits from individuals alleging the talc products caused illness, the Journal said, citing people familiar with the matter.

Overview of Pending Lawsuits

Increase in Legal Proceedings

L'Oreal said in its latest half-year report that about 760 US proceedings over the alleged presence of asbestos particles in some talc-containing cosmetic products were pending as of June 30, up from about 620 at the end of 2025, and that it strongly contests the claims.

Potential Corporate Restructuring

The Journal said L'Oreal is considering moving tort liabilities into a separate corporate entity to unload them through a sale to an outside investor, allowing the company to separate its exposure from its operating businesses.

Alternative Solutions to Chapter 11

As an option to address the claims outside Chapter 11, L'Oreal's advisers are exploring a sale similar to Honeywell's divestiture last year of certain asbestos liabilities to corporate liability acquisition platform Delticus, the Journal said.

L'Oreal, Weil Gotshal & Manges and Ducera did not immediately respond to Reuters requests for comment.

Industry-Wide Impact of Talc Litigation

Johnson & Johnson's Legal Battles

More broadly, talc litigation has cost Johnson & Johnson billions of dollars in a legal fight lasting more than a decade, and has prompted several companies to try to resolve claims in bankruptcy court.

J&J Settlements and Bankruptcy Attempts

In July, J&J said it would pay an estimated $5.5 billion to resolve tens of thousands of lawsuits alleging its baby powder and other talc products cause ovarian cancer. It had earlier filed for three bankruptcies through a shell-company subsidiary in an effort to settle the cases, though each ended in dismissal.

Other Companies Facing Similar Issues

Avon Products, a US-based holding company of the Avon beauty brand, started Chapter 11 proceedings in 2024 to address its debt and talc liabilities.

Additional Lawsuits Against L'Oreal

Hair Relaxer Product Claims

L'Oreal is also facing thousands of lawsuits alleging its hair relaxer products could cause cancer in women. Arizona sued L'Oreal and its US subsidiary in September, alleging the cosmetics company hid evidence that the products could cause cancer.

L'Oreal's Response

L'Oreal USA has previously said the company is confident in the safety of its products and believes those claims are without legal or scientific merit.

(Reporting by Fabiola Arámburo in Mexico City; Editing by Shilpi Majumdar, Maju Samuel and Subhranshu Sahu)

Key Takeaways

  • L'Oréal faces about 760 US lawsuits over asbestos in talc products as of June 30, 2026, up from roughly 620 at end‑2025, and strongly disputes the claims (Reuters)
  • It has retained Weil Gotshal & Manges and Ducera Partners to explore spinning off these liabilities into a separate legal entity for potential sale—echoing Honeywell’s 2025 divestiture of asbestos liabilities to Delticus (SEC filings)
  • The move reflects a broader trend: companies like Johnson & Johnson and Avon have grappled with talc lawsuits via large settlements or bankruptcy structures, underscoring industry‑wide exposure

Frequently Asked Questions

Why is L'Oreal exploring restructuring related to chemical liabilities?
L'Oreal is facing rising US legal claims linked to talc and chemical ingredients in its cosmetics and is seeking ways to manage or unload these liabilities.
How many lawsuits is L'Oreal currently facing over talc-containing products?
As of June 30, L'Oreal faced about 760 US proceedings regarding asbestos particles in talc-containing cosmetics, up from about 620 at the end of 2025.
What strategy is L'Oreal considering for its tort liabilities?
L'Oreal may move tort liabilities into a separate corporate entity to sell them to an outside investor, thereby separating them from core business operations.
Has L'Oreal commented on the safety of its products?
L'Oreal USA maintains confidence in the safety of its products, stating that claims about harmful effects are without legal or scientific merit.
How have other companies in the cosmetics industry handled similar liabilities?
Companies like Johnson & Johnson and Avon have faced similar litigation, with strategies including large settlement payments and bankruptcy filings.

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