Kering Sells Beauty Division to L’Oréal in $4.7 Billion Strategic Partnership

Landmark Beauty Industry Acquisition

L’Oréal has reportedly reached a $4.7 billion agreement to acquire Kering Beauté, marking the beauty giant’s largest acquisition to date according to industry reports. The transaction includes the coveted Creed fragrance brand and establishes what sources describe as a 50-year strategic partnership between the two French luxury conglomerates.

Landmark Beauty Industry Acquisition
Strategic Benefits for Both Companies
Kering’s Strategic Refocus
L’Oréal’s Luxury Expansion
Industry Context and Expert Analysis
Future Implications

Strategic Benefits for Both Companies

Analysts suggest this deal creates a win-win scenario for both corporations. For Kering, the sale provides substantial cash proceeds that the company reportedly plans to use toward reducing its $11 billion debt burden. Meanwhile, L’Oréal strengthens its position as what industry observers call the world’s leading luxury beauty company.

“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,” L’Oréal Groupe CEO Nicolas Hieronimus stated in the official announcement.

Kering’s Strategic Refocus

The move comes at a critical time for Kering, which according to financial reports suffered a 12% revenue loss in 2024 to $20 billion and was down 16% through the first half of 2025. The company’s flagship Gucci brand reportedly dropped 26% in revenues during the first half of 2025 to $3.5 billion.

Newly appointed Kering CEO Luca de Meo, who joined the company just over a month ago after resigning as CEO of Renault, indicated he was prepared to make difficult decisions to address the company’s challenges. Analysts at Bernstein characterized the sale as “a bitter but necessary medicine” that allows Kering to concentrate on its core fashion business.

L’Oréal’s Luxury Expansion

The acquisition represents a significant expansion of L’Oréal’s luxury portfolio, which already includes numerous industry-leading brands. According to company reports, L’Oréal’s Luxe division generated $18.1 billion last year and delivered $8.9 billion in the first half of 2025.

The deal brings Creed, which the Wall Street Journal reported as the largest selling high-end fragrance brand after Jo Malone, into L’Oréal’s portfolio. Sources indicate Creed generated over $300 million in the year preceding its sale to Kering, and Kering’s beauty sales reportedly rose 9% in the first half of this year., according to technological advances

Industry Context and Expert Analysis

This transaction occurs as Kering’s chief competitor LVMH has developed its Christian Dior beauty business in-house and recently launched Louis Vuitton lipsticks at premium price points. Bernstein analyst Luca Solca characterized Kering’s decision to partner with L’Oréal rather than develop beauty in-house as a necessary “U-turn.”, according to additional coverage

Consultant and adjunct professor Bruno-Roland Bernard shared with CNBC that “L’Oréal enjoys strong momentum in the Luxe division and they must be looking forward to getting hold of the perfume and beauty licenses associated with Kering’s prestigious yet relatively underdeveloped brands.”

Future Implications

The agreement includes exclusive licensing rights to Kering’s brands in fragrances and beauty, with Gucci reportedly transitioning from Coty to L’Oréal in 2028. The companies are also establishing a 50/50 joint venture to explore additional business opportunities combining luxury, wellness and longevity.

The all-cash deal is contingent on French regulatory approvals and is expected to be completed in the first half of 2026, according to the official announcement. This partnership follows L’Oréal’s successful collaboration with Kering’s Yves Saint Laurent brand, which analysts suggest provided a proven template for the expanded relationship.

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Gucci owner Kering has reportedly reached a €4 billion agreement to transfer its beauty operations to cosmetics giant L’Oreal. The deal marks new CEO Luca de Meo’s first significant strategic move to reduce the luxury group’s substantial debt burden while refocusing on core fashion labels.

Major Beauty Business Transfer

French luxury conglomerate Kering has agreed to sell its beauty division to cosmetics leader L’Oreal for approximately €4 billion ($4.66 billion), according to reports confirmed Sunday. The transaction represents a significant strategic pivot under newly appointed CEO Luca de Meo as he moves to address the company’s substantial debt load and refocus on core fashion operations.