Core Insights - Kering Group and L'Oréal Group have announced a long-term strategic partnership in the luxury beauty and health sector, involving L'Oréal's acquisition of the Creed brand and licensing agreements for Kering's renowned brands, with a total deal value of €4 billion (approximately ¥33.2 billion) [1][4][6] Group 1: Strategic Partnership Details - The partnership includes Kering selling its beauty business, including the Creed brand, to L'Oréal, along with a 50-year licensing agreement for Kering's iconic perfume stores [5][6] - Creed, a historic perfume brand founded in 1760, was acquired by Kering for €3.5 billion just four months prior to this new deal [5][6] - L'Oréal will also gain exclusive rights to develop, produce, and distribute Gucci's beauty products, as well as create and distribute fragrances for Bottega Veneta and Balenciaga under a separate 50-year licensing agreement [6][7] Group 2: Financial Context and Implications - Kering is under pressure from both debt and performance issues, with a reported 62% decline in net profit and a net debt of €9.5 billion as of June 2025 [7][8] - The sale of Creed and other businesses is seen as a way for Kering to alleviate financial pressure and refocus on its core strengths [7][8] - L'Oréal's acquisition of Creed is part of its broader ambition to become a major player in the fast-growing high-end perfume market, following several strategic acquisitions in recent years [7][8][11] Group 3: Market Position and Future Outlook - L'Oréal's recent acquisitions, including Aesop for $2.525 billion (approximately ¥17 billion), highlight its aggressive expansion strategy in the luxury beauty sector [8][11] - The partnership is expected to solidify L'Oréal's position as the world's largest luxury beauty company and explore new opportunities in the health sector [11][12]

Core Viewpoint - Kering Group and L'Oréal Group have announced a long-term strategic partnership in the luxury beauty and health sector, with a total deal value of €4 billion (approximately ¥332 billion), marking the largest acquisition in the beauty sector this year [4][11]. Group 1: Details of the Agreement - The agreement consists of three main parts: Kering will sell its beauty business, including the Creed brand, to L'Oréal, along with a 50-year licensing agreement for Kering's iconic perfume brands [9][10]. - Creed, a historic perfume brand founded in 1760, was acquired by Kering for €3.5 billion just four months prior to this deal, indicating a rapid change in ownership [9][12]. - L'Oréal will also receive exclusive rights for the development, production, and distribution of Gucci's beauty products, as well as a 50-year exclusive license for the creation and distribution of Bottega Veneta and Balenciaga's beauty products [10][11]. Group 2: Strategic Implications - This partnership reflects Kering's need to alleviate financial pressure and focus on its core business, as the company faces declining revenue and a significant net profit drop of 62% [11][12]. - L'Oréal's aggressive expansion strategy is highlighted by this acquisition, positioning the company as a major player in the rapidly growing high-end perfume market [13][14]. - The collaboration will also explore business opportunities at the intersection of luxury goods, health, and longevity, with plans to establish a 50-50 joint venture [11][12]. Group 3: Market Context - L'Oréal has been actively acquiring brands to strengthen its position in the beauty market, including recent acquisitions of luxury brands and investments in emerging markets [13][14]. - The company has a history of building its empire through strategic acquisitions, with a diverse portfolio of over 50 brands across various beauty segments [15].