Luxury Fashion House Kering Confirms Beauty Deal With L’Oréal

Kering and L’Oréal confirmed a $4.7 billion beauty deal. (Dreamstime)

Key Points

• Kering is selling its House of Creed beauty business to L’Oreal for approximately 4 billion euros in cash.
• The deal includes a 50-year licensing agreement for fragrance and beauty products for Bottega Veneta and Balenciaga.
• Kering and L’Oreal will also form an exclusive venture to explore business opportunities in the wellness field.

Luxury brand company Kering confirmed it was in a deal with L’Oréal to sell its beauty business to the French cosmetics giant for about €4 billion in cash ($4.7 billion).

In a statement late Sunday afternoon, Kering, which owns Gucci, Balenciaga, and other brands, said the arrangement includes an exclusive venture to explore business opportunities in the wellness field. It will sell its Kering Beaute to L’Oréal, including House of Creed, as part of the arrangement.

Kering CEO Luca de Meo, said the transaction “will accelerate the development of fragrance and cosmetics for our major Houses, allowing them to achieve scale” in the category. The two will enter a 50-year licensing deal for the creation, development, and distribution of fragrance and beauty products for Gucci after the end of a current license with Coty, and licenses to develop products for Bottega Veneta and Balenciaga.

L’Oréal will also pay royalties to Kering for the use of its licensed brands, the announcement said.

“This partnership will further solidify our position as the world’s #1 luxury beauty company and allow us to explore new avenues in wellness together,” said L’Oréal Groupe CEO Nicolas Hieronimus.

Write to Liz Moyer at liz.moyer@barrons.com