Kering in Talks to Sell Beauty Unit to L’Oréal for $4 Billion

The great French luxury group Kering is reportedly negotiating the sale of its beauty division to cosmetics giant L’Oréal in a deal valued at about US $4 billion.

Sources familiar with the matter say the transaction could be announced imminently.

Under the terms discussed, L’Oréal would acquire Kering’s fragrance brand Creed and obtain rights to develop beauty products for Kering-owned fashion houses such as Gucci, Bottega Veneta, Balenciaga and Alexander McQueen, according to Reuters reports.

Kering launched its own beauty arm in 2023, shortly after acquiring Creed for 3.5 billion euros.

The proposed sale signals a shift in strategy under newly-appointed CEO Luca de Meo, who took charge earlier this year and is tasked with stabilising the group’s performance.

At the end of June, Kering’s net debt stood at roughly 9.5 billion euros, a factor cited by analysts as a driver behind the decision to explore divestments.

From the perspective of L’Oréal, the acquisition would bring luxury fashion-linked beauty assets into its portfolio at a time when the market is consolidating. Either party could still walk away from the deal prior to signing, however.

The possible transaction has already sparked a positive reaction in markets. Since Kering announced De Meo’s appointment, its stock has surged by around 60 percent.

If everything goes well and the deal is successfully finalized, it would be one of the biggest moves in the luxury-beauty integration segment this year.