French luxury group Kering SA (OTC:PPRUF) (OTC:PPRUY) on Sunday disclosed a long-term partnership with L’Oréal (OTC:LRLCF) in the luxury beauty and wellness segment.
As per the agreement, the Gucci-owner will sell its Kering Beauté business to L’Oréal for 4 billion euros ($4.66 billion) in cash.
L’Oréal will acquire the iconic high-end luxury fragrance brand, House of Creed, and gain exclusive beauty and fragrance licenses for several Kering brands.
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Under L’Oréal Luxe, Creed will expand its global reach in both men’s and women’s luxury fragrance markets.
The transaction is expected to close in the first half of 2026, with L’Oréal paying royalties to Kering for its licensed brands.
50-Year Exclusive Brand Licenses
The partnership grants L’Oréal exclusive 50-year licenses to create, develop, and distribute fragrance and beauty products for Gucci, Bottega Veneta, and Balenciaga.
The Gucci license will begin after the current Coty agreement ends, while the Bottega Veneta and Balenciaga licenses will take effect upon the transaction’s closing.
Joint Venture in Luxury Wellness and Longevity
Beyond beauty, Kering and L’Oréal also plan to form a 50/50 joint venture to explore opportunities in luxury, wellness, and longevity.
The partnership will combine L’Oréal’s innovation expertise with Kering’s luxury market insight to create advanced experiences and services for high-end consumers.
Management Commentary
Luca de Meo, CEO of Kering, said, “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.”
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