Kering
Oct. 23, 2025, 5:07 a.m.
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Kering Sells Beauty Unit to L’Oréal for $4.7 Billion to Cut Debt

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Paris: Gucci owner Kering has agreed to sell its beauty business to L’Oréal for $4.66 billion, marking a major strategic shift under new CEO Luca de Meo as the group seeks to reduce debt and refocus on its core fashion operations.

Under the deal, L’Oréal will acquire Creed, Kering’s luxury fragrance brand purchased in 2023 for €3.5 billion, and gain 50-year exclusive rights to develop perfumes and beauty products under fashion houses Bottega Veneta and Balenciaga. Once Kering’s existing contract with Coty expires in 2028, L’Oréal will also assume the Gucci fragrance licence.

Analysts at Bernstein called the sale “bitter but necessary,” noting that the divestment helps address Kering’s €9.5 billion debt and €6 billion in lease liabilities. The company’s beauty division, established just two years ago, reported a €60 million operating loss in the first half of 2025.

The move follows de Meo’s decision to suspend plans to fully acquire Valentino and explore real estate divestments to strengthen Kering’s balance sheet. Shares in Kering rose 4.7%, while L’Oréal gained 1.4% after the announcement.

For L’Oréal, the acquisition, its largest to date, surpassing its $2.5 billion purchase of Aesop in 2023, bolsters its fast-growing Luxe division, which includes Yves Saint Laurent Beauty. “L’Oréal is securing some of the most prestigious yet underdeveloped luxury brands,” said Bruno-Roland Bernard, a Paris-based consultant.

The deal is expected to close in the first half of 2026, with Evercore and Centerview advising Kering, and Bank of America and Rothschild representing L’Oréal.



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