What's Happening?
L'Oreal is set to acquire Kering's beauty portfolio, including the prestigious fragrance maker Creed, for $4.6 billion. This acquisition includes the rights to develop beauty lines for Kering's fashion house brands, such as Gucci, once the current agreements
expire. The deal also involves a 50-50 joint venture to explore opportunities in beauty and wellness. Kering's CEO, Luca de Meo, emphasized that this partnership with L'Oreal will accelerate the development of fragrances and cosmetics for Kering's major brands, allowing them to achieve greater scale and unlock long-term potential.
Why It's Important?
The acquisition is a strategic move for both companies. For L'Oreal, it represents an opportunity to strengthen its position in the luxury beauty market by adding high-profile brands to its portfolio. For Kering, the sale allows the company to focus on its core competencies in fashion, as it has faced challenges in managing beauty brands with different distribution channels and customer bases. The deal is expected to provide financial relief to Kering, which has been impacted by a luxury market slump, and enable it to concentrate on revitalizing its fashion brands.
What's Next?
The transaction is expected to be finalized in the first half of 2026. L'Oreal will begin producing beauty products under the new licenses once existing agreements, such as the one with Coty for Gucci, conclude. The joint venture between L'Oreal and Kering may lead to new product lines and innovations in the beauty and wellness sectors. Industry observers will be keen to see how this acquisition influences market dynamics and whether it prompts further mergers and acquisitions in the luxury beauty industry.
