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

Kering, the owner of luxury brands such as Gucci and Saint Laurent, has agreed to sell its beauty business to L’Oréal for €4bn ($4.65bn).

The deal includes the transfer of the House of Creed and the beauty and fragrance licences for Kering’s luxury brands to L’Oréal.

The acquisition will see L’Oréal obtaining a 50-year exclusive licence to create, develop and distribute fragrance and beauty products for Gucci once the existing agreement with Coty concludes.

L’Oréal will also receive similar exclusive licences for Bottega Veneta and Balenciaga, which will come into effect after the deal closes.

The transaction, payable in cash, is expected to close in the first half of 2026, subject to regulatory approvals.

To facilitate the partnership, a strategic committee will be formed to coordinate between Kering’s brands and L’Oréal and to oversee the partnership’s progress.

Kering will earn royalties from L’Oréal for the use of its brands.

Kering CEO Luca de Meo added: “This strategic alliance marks a decisive step for 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.”

Kering and L’Oréal have also announced plans to form a joint venture to explore opportunities in the luxury, wellness and longevity sectors.

This venture will be a 50/50 partnership aimed at creating new offerings that combine L’Oréal’s innovation with Kering’s luxury market expertise.

Kering has retained the right to sell Kering Beauté to L’Oréal, which has been granted exclusivity under the terms of the deal.

L’Oréal Groupe CEO Nicolas Hieronimus stated: “I am delighted to forge this long-term strategic alliance with one of the world’s most prestigious, creative and visionary luxury groups. 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.”