Kering to divest beauty business to L’Oréal in €4bn transaction

Core Viewpoint - Kering has agreed to sell its beauty business to L'Oréal for €4 billion ($4.65 billion), which includes the transfer of fragrance licenses for its luxury brands [1][2]. Group 1: Transaction Details - The deal includes a 50-year exclusive license for L'Oréal to create, develop, and distribute fragrance and beauty products for Gucci after the current agreement with Coty ends [1][2]. - L'Oréal will also receive exclusive licenses for Bottega Veneta and Balenciaga, effective upon deal closure [2]. - The transaction is expected to close in the first half of 2026, pending regulatory approvals [2]. Group 2: Strategic Implications - Kering's CEO emphasized that this strategic alliance will accelerate the development of fragrance and cosmetics for Kering's major brands, unlocking their long-term potential [3]. - The partnership aims to combine L'Oréal's expertise in beauty with Kering's luxury market reach, venturing into wellness and longevity sectors [4][6]. - A joint venture will be established as a 50/50 partnership to create new offerings that leverage both companies' strengths [5]. Group 3: Market Positioning - L'Oréal's CEO stated that this alliance will solidify its position as the leading luxury beauty company and expand its reach into dynamic segments of luxury beauty [6]. - The acquisition of Creed will position L'Oréal as a key player in the growing niche fragrance market, with significant growth potential for Gucci, Bottega Veneta, and Balenciaga [7].