Core Viewpoint - Kering Group announced an agreement with L'Oréal Group for the sale of its beauty division for €4 billion, marking a significant strategic shift for Kering [1] Group 1: Transaction Details - L'Oréal will acquire Kering's beauty business, which includes the Creed brand and a 50-year license for several luxury brands such as Bottega Veneta and Balenciaga [1] - Gucci will join the agreement after the expiration of its licensing period with Coty Group [1] - The transaction will be a cash payment and is expected to be completed in the first half of 2026 [1] Group 2: Financial Performance - Kering's beauty division reported annual revenue of €323 million for 2024, primarily driven by the Creed brand [1]

Core Viewpoint - Kering Group has agreed to sell its beauty business to L'Oréal for €4 billion (approximately $4.66 billion) as part of a strategic move by new CEO Luca de Meo to address high debt levels and refocus on core fashion operations [1][2] Group 1: Transaction Details - The agreement allows L'Oréal to acquire Kering's perfume brand Creed and grants a 50-year exclusive license to develop beauty products based on Kering's fashion brands, including Gucci, Balenciaga, and Saint Laurent [1] - The sale is a significant step for Kering to reduce its net debt, which stood at €9.5 billion as of June 30, alongside €6 billion in long-term lease liabilities [1] Group 2: Business Performance - Kering's beauty business, established in 2023, recorded an operating loss of €60 million in the first half of the year, highlighting the challenges faced in diversifying away from Gucci [2] - Gucci's revenue fell by 25% year-on-year in the last fiscal quarter, increasing Kering's pressure to deleverage and avoid further credit rating downgrades [2] Group 3: Strategic Implications - The transaction marks a shift in strategy under CEO de Meo, who took over in September and has committed to rationalizing the business and restructuring if necessary to lower debt levels [2] - L'Oréal's acquisition is its largest to date, surpassing the $2.5 billion purchase of Australian brand Aesop in 2023, indicating L'Oréal's aggressive expansion strategy [2]

French luxury goods company Kering said Sunday it is selling its beauty division to L’Oreal for 4 billion euros ($4.66 billion). Under the agreement, Clichy, France-based L’Oreal will acquire the House of Creed high-end fragrance company as well as licenses to create beauty and fragrance products for Kering brands like Gucci, Bottega Veneta and Balenciaga. The companies said they will establish a strategic committee to ensure coordination between Kering brands and L’Oréal. Kering and L’Oréal said they ar ...

Core Viewpoint - Kering SA has agreed to sell its beauty division to L'Oreal SA for €4 billion ($4.7 billion) as part of a strategic alliance aimed at accelerating growth and improving the company's performance in the luxury market [1][2]. Group 1: Strategic Move - The sale marks the first strategic initiative by CEO Luca de Meo, who took over in September, as Kering faces challenges such as declining demand in China and potential higher tariffs in the US [3]. - The partnership with L'Oreal, the largest cosmetics and beauty company globally, is expected to enhance the development of fragrance and cosmetics for Kering's major brands, allowing them to scale and unlock long-term potential [3]. Group 2: Background and Context - Kering launched its beauty division in 2023 and acquired the high-end fragrance brand Creed for approximately €3.5 billion to establish its beauty platform [2]. - The company is currently dealing with significant issues, including a high debt burden that has raised concerns among investors [3]. - The Pinault family, who are the majority shareholders, hold a 42% stake in Kering and 59% of the voting rights, indicating strong control over the company's strategic direction [4].

Kering SA agreed to sell its beauty division to L’Oreal SA as part of a long-term strategic alliance, with Chief Executive Luca de Meo seeking to turn around the French luxury giant’s fortunes. https://t.co/kvMWoUKLYg ...

Core Insights - Kering and L'Oréal have officially announced a long-term strategic partnership focused on beauty and wellness [1] Group 1: Partnership Details - The agreement includes L'Oréal's acquisition of the House of Creed and grants L'Oréal a 50-year exclusive license for creating, developing, and distributing fragrance and beauty products for Gucci, starting after Kering's current license with Coty expires [2] - The partnership also encompasses 50-year exclusive licenses for Bottega Veneta and Balenciaga, effective upon the transaction's closure [3] - The total value of the agreement is set at 4 billion euros, to be paid in cash at closing, which is anticipated in the first half of 2026. Additionally, L'Oréal will pay royalties to Kering for the use of its licensed brands [3] Group 2: Future Opportunities - Beyond beauty, Kering and L'Oréal plan to explore business opportunities at the intersection of luxury, wellness, and longevity through a 50/50 joint venture [4]

Core Insights - Kering, the owner of Gucci, has agreed to sell its beauty business to L'Oreal for 4 billion euros, equivalent to approximately $4.66 billion, as part of a strategic move by new CEO Luca de Meo to address the luxury group's high debt levels [1] Company Summary - The sale of Kering's beauty business marks a significant shift in the company's strategy under the leadership of CEO Luca de Meo [1] - The transaction is valued at 4 billion euros, indicating a substantial investment by L'Oreal in expanding its portfolio [1] Industry Context - This acquisition by L'Oreal reflects ongoing consolidation trends within the beauty industry, as companies seek to enhance their market positions and product offerings [1] - The deal may influence competitive dynamics in the luxury beauty segment, potentially impacting other players in the market [1]

Core Insights - Kering and L'Oréal have announced a long-term strategic partnership in luxury beauty and wellness, which includes the acquisition of the House of Creed by L'Oréal and exclusive licenses for Kering's iconic brands [3][4][5] - The partnership aims to leverage the strengths of both companies to accelerate growth in high-potential categories and explore new business opportunities in wellness and longevity [4][8] - The total value of the agreement, including the sale of Creed and the establishment of 50-year licenses, is estimated at €4 billion, with cash payment expected in the first half of 2026 [7] Company Summaries Kering - Kering is a global luxury group that encompasses various creative Houses, including Gucci, Saint Laurent, and Bottega Veneta, and generated revenue of €17.2 billion in 2024 [10] - The company aims to enhance the development of fragrance and cosmetics for its major Houses through this partnership, similar to the success achieved with Yves Saint Laurent Beauté under L'Oréal's management [9] - Kering will grant L'Oréal exclusive licenses for the creation and distribution of fragrance and beauty products for Gucci, Bottega Veneta, and Balenciaga, starting after the expiration of existing agreements [6][7] L'Oréal - L'Oréal is the world's leading beauty company, with a portfolio of 37 international brands and sales amounting to €41.18 billion in 2023 [11][12] - The partnership with Kering will solidify L'Oréal's position as the top luxury beauty company and expand its reach into new segments, particularly in the niche fragrance market through the House of Creed [9] - L'Oréal's expertise in beauty innovation will be combined with Kering's understanding of luxury clients to create new experiences and services in wellness [8][9]

Core Insights - Kering and L'Oréal have announced a long-term strategic partnership in luxury beauty and wellness, which includes the acquisition of the House of Creed by L'Oréal and exclusive licenses for Kering's iconic brands [2][3][4]. Partnership Details - The agreement involves a €4 billion valuation, with cash payment expected at closing in the first half of 2026 [7]. - Kering will grant L'Oréal 50-year exclusive licenses for fragrance and beauty products for Gucci, Bottega Veneta, and Balenciaga, starting upon the closing of the transaction [5][6]. - A strategic committee will be established to ensure coordination between Kering brands and L'Oréal [6]. Market Positioning - The partnership aims to leverage L'Oréal's expertise in beauty and Kering's luxury brand portfolio to accelerate growth in high-potential categories [3][9]. - L'Oréal aims to solidify its position as the world's leading luxury beauty company and expand into new segments of luxury beauty through this alliance [9]. Future Ventures - Beyond beauty, Kering and L'Oréal will explore business opportunities in wellness and longevity through a planned 50/50 joint venture [8].

Core Insights - Kering and L'Oréal have announced a long-term strategic partnership in luxury beauty and wellness, which includes the acquisition of the House of Creed by L'Oréal and exclusive licenses for Kering's iconic brands [3][4][5] - The partnership aims to leverage the strengths of both companies to accelerate growth in high-potential categories and explore new business opportunities in wellness and longevity [4][8] Company Overview - Kering is a global luxury group with a portfolio of renowned brands including Gucci, Saint Laurent, and Bottega Veneta, generating €17.2 billion in revenue in 2024 [10] - L'Oréal is the world's leading beauty player, with a diverse portfolio of 37 international brands and sales of €41.18 billion in 2023, focusing on sustainability and innovation [11][12] Strategic Details - The agreement includes a €4 billion valuation, with Kering selling Kering Beauté, including Creed, to L'Oréal, and granting 50-year exclusive licenses for Gucci, Bottega Veneta, and Balenciaga [7][6] - A strategic committee will be established to ensure coordination between Kering brands and L'Oréal, monitoring the partnership's progress [7] Market Positioning - The partnership is expected to solidify L'Oréal's position as the world's 1 luxury beauty company and enhance Kering's fragrance and cosmetics development [9] - The collaboration aims to tap into the fast-growing niche fragrance market and expand into new segments of luxury beauty [9]