L’Oréal has confirmed that it will acquire the beauty business of French luxury group Kering for €4bn.
The deal will see L’Oréal purchase fragrance brand Creed, be granted 50-year exclusive fragrance and beauty licenses for Kering’s Bottega Veneta and Balenciaga brands (to begin once the transaction is closed), and the rights to a 50-year exclusive beauty and fragrance license for the Gucci brand, which will begin following the expiration of the current license with Coty. It is thought that the license with Coty runs until 2028.
L’Oréal already has the fragrance and beauty license for Kering-owned brand Yves Saint Laurent.
L’Oréal will also enter a 50/50 joint venture with Kering to explore business opportunities in wellness and longevity. L’Oréal says the partnership will create experiences and services combining L’Oréal’s products with Kering’s understanding of luxury clients.
L’Oréal will pay €4bn, payable in cash at the closing of the deal, which is expected in the first half of 2026. L’Oréal will also pay royalties to Kering for the use of its licensed brands.
Through the deal, L’Oréal significantly reinforces its position in fragrance, especially in the high-growth niche segment with Creed, and in the luxury segment with Bottega Veneta and Balenciaga. It also adds to L’Oréal’s successful line-up of couture fragrance and beauty brands with the addition of Gucci.
L’Oréal CEO Nicolas Hieronimus commented: “This partnership will further solidify our position as the world’s number-one luxury beauty company and allow us to explore new avenues in wellness together. The addition of these extraordinary brands perfectly complements our existing portfolio and significantly expands our reach into new, dynamic segments of luxury beauty. Through Creed, we will establish ourselves as one of the leading players in the fast-growing niche fragrance market. Gucci, Bottega Veneta and Balenciaga are all exceptional couture brands with enormous potential for growth.”
However, the sale of the beauty division is a U-turn for Kering, which has been struggling and brought in former Renault executive Luca de Meo as CEO in September in a bid to turn the business around and reduce its debt.
In 2023, Kering revealed that it was looking to build its beauty and fragrance in-house, and acquired Creed for around €3.5bn. This was shortly after setting up its beauty division and appointing former Estée Lauder Companies executive Raffaella Cornaggia as the unit’s CEO. At the time, the company said fragrance was a strategic category. The group has also brought a number of its fragrance licenses in-house, such as Bottega Veneta, Balenciaga, Alexander McQueen, Pomellato and Qeelin. Last year, Kering also took a minority stake in French fragrance brand Matière Première.
“This strategic alliance marks a decisive step for Kering,” stated Luca de Meo, CEO of Kering. “Joining forces with the global leader in beauty, we will accelerate the development of fragrance and cosmetics for our major houses, allowing them to achieve scale in this category and unlock their immense long-term potential, as did Yves Saint Laurent Beauté under L’Oréal’s stewardship. Together, we will also venture into new frontiers of wellness, combining the unrivalled expertise of L’Oréal with our unique luxury reach. This partnership allows us to focus on what defines us best: the creative power and desirability of our houses.”