L'Oréal buys Kering's beauty business

L'Oréal buys Kering's beauty business

2025 – 2026Fashion

“On 19 October 2025 L'Oréal agreed to pay Kering €4 billion for its beauty arm, Creed and 50-year licences for Bottega Veneta, Balenciaga and, from 2027, Gucci; it closed on 31 March 2026.”

Late on Sunday 19 October 2025, the French luxury group Kering and the world's biggest beauty company, L'Oréal, announced a binding agreement worth €4 billion, payable in cash at closing. L'Oréal would buy Kering Beauté, Kering's beauty arm, which includes House of Creed, a niche perfume house founded in 1760 as a tailoring business for the royal families of Europe, whose laboratory is at Fontainebleau. L'Oréal would also get 50-year exclusive licences to make and sell fragrance and beauty products under the Bottega Veneta and Balenciaga names from the day of closing, and the right to do the same for Gucci once an existing licence held by Coty ran out. Kering keeps its fashion houses and is paid royalties. The €4 billion is the value both companies put on the whole package, Creed and the licences together; neither called it an enterprise value or gave a separate price for Creed.

Kering had a debt problem and a Gucci problem. Its net debt was €9.5 billion at the end of June 2025, with about €6 billion more in long-term leases, and Gucci, which made 44.5 per cent of Kering's revenue and 63 per cent of its operating income in 2024, was shrinking. The beauty arm was the project of François-Henri Pinault, the Pinault family's head of Kering, who was chairman and chief executive until September 2025: Kering Beauté was set up in 2023 and bought Creed that June, reported at about €3.5 billion although Kering never published a price. The Italian car executive Luca de Meo, named chief executive in June and in office from 15 September 2025, told shareholders he would cut debt and, where needed, rationalise and reorganise. Selling the beauty arm for about what Creed had reportedly cost was his first big move, and Kering's shares rose about 5 per cent the next day.

For L'Oréal and its chief executive Nicolas Hieronimus, who ran L'Oréal Luxe from 2011 to 2018 and became chief executive in 2021, the deal added Creed, which he said would make L'Oréal one of the leading players in niche fragrance, and three more luxury names. The structure copied a deal of 2008. Then PPR, as Kering was called, sold YSL Beauté to L'Oréal for €1.15 billion in enterprise value but kept the Yves Saint Laurent, Boucheron and Stella McCartney names and gave L'Oréal a very long-term licence to use them. Luca de Meo's quote in the 2025 release points to that precedent: Yves Saint Laurent Beauté grew under L'Oréal's stewardship, and he wanted Kering's other houses to do the same.

Gucci was the sticking point. Its fragrances had been licensed out since 1978, to Wella, then Procter & Gamble, and since 2016 to Coty, whose contract ran to 30 June 2028. The day after the announcement a Coty subsidiary sued Kering and Gucci in an English commercial court, and Kering said it would defend itself. On 7 July 2026 the fight ended: Kering bought Coty's licence back a year early for about $400 million ($250 million in 2026 and up to $150 million by September 2027), L'Oréal agreed to repay about 70 per cent of that cost and of the inventory, and L'Oréal's own 50-year Gucci licence is due to start on 1 July 2027, subject to approvals.

Competition authorities cleared the deal and it closed on 31 March 2026. Kering received €4.0 billion in cash; its net debt fell from €8.0 billion at the end of 2025 to €3.3 billion on 30 June 2026, helped by the sale proceeds and €497 million from property sales. L'Oréal has counted Creed, Bottega Veneta and Balenciaga in its accounts since April and says Creed is off to a good start. The planned 50/50 wellness and longevity joint venture has been announced but, in the sources read, had not been launched by October 2026. The deal shows a way for luxury houses to be paid for beauty without selling their names: the fashion brand stays with its owner, and a specialist makes and sells the perfume for decades.

What happened

  1. 2025

  2. Kering announces that Luca de Meo, who ran Renault, will become chief executive from 15 September, with François-Henri Pinault staying chairman; shareholders are to vote on 9 September.

    Hôpital Laennec, 40 rue de Sèvres, Paris 7e: the 17th- and 18th-century hospital buildings that house the headquarters of Kering and Balenciaga, where Kering's board named Luca de Meo and sold its beauty arm

  3. Kering's half-year results: net debt €9.5 billion at 30 June. Kering Beauté, with Creed at its heart, sold €150 million in six months, up 9 per cent.

    Fontainebleau, Seine-et-Marne: where Creed's laboratory makes its perfumes, on the outskirts of Paris

  4. At Kering's shareholders' meeting de Meo is elected a director and tells shareholders: 'We must continue to reduce our debt, reduce our costs. And where necessary, rationalize, reorganize, reposition some of our brands.'

    Hôpital Laennec, 40 rue de Sèvres, Paris 7e: the 17th- and 18th-century hospital buildings that house the headquarters of Kering and Balenciaga, where Kering's board named Luca de Meo and sold its beauty arm

  5. De Meo takes up his duties as chief executive of Kering; the roles of chairman and chief executive are split, and Pinault stays chairman.

    Hôpital Laennec, 40 rue de Sèvres, Paris 7e: the 17th- and 18th-century hospital buildings that house the headquarters of Kering and Balenciaga, where Kering's board named Luca de Meo and sold its beauty arm

  6. The Wall Street Journal reports that Kering is in advanced talks to sell its beauty business to L'Oréal for about $4 billion, and Bloomberg puts it at about €4 billion; the deal could be announced the next week. Reuters, in the early hours of 19 October, adds that Kering is 'nearing' a sale.

  7. 11:50 p.m.

    Kering and L'Oréal announce a binding agreement worth €4 billion in cash: Creed, 50-year licences for Bottega Veneta and Balenciaga from closing and for Gucci after the Coty licence, royalties to Kering and a planned 50/50 wellness joint venture. The release was filed at 23:50 on Sunday evening.

    41 rue Martre, Clichy: L'Oréal's administrative headquarters and the dateline of the joint release ('Paris and Clichy')

  8. The market reacts: Kering's shares rise about 5 per cent and L'Oréal's slightly, on analysts' view that the sale cuts Kering's debt; L'Oréal's chief executive Nicolas Hieronimus says Creed will make L'Oréal one of the leading players in niche fragrance.

    14 rue Royale, Paris 8e: L'Oréal's registered office

  9. A Coty subsidiary, HFC Prestige International Operations Switzerland, lodges a claim in a UK commercial court against Guccio Gucci, Gucci America and Kering over the Gucci beauty licence.

    Rolls Building, Fetter Lane, London: home of the Business and Property Courts, where the Commercial Court has its registry; Coty's subsidiary sued Kering and Gucci in a UK commercial court on 20 October 2025

  10. Kering's third-quarter sales: down 5 per cent on a comparable basis, Gucci down 14 per cent; Kering Beauté up 3 per cent, with Balenciaga's first fragrance collection launched. Management says the plan on the Gucci licence 'is to wait for the expiration' of Coty's.

    Hôpital Laennec, 40 rue de Sèvres, Paris 7e: the 17th- and 18th-century hospital buildings that house the headquarters of Kering and Balenciaga, where Kering's board named Luca de Meo and sold its beauty arm

  11. The lawsuit becomes public. Coty's chief executive says the company will 'defend its rights until the last day of the contract'; Kering says it 'categorically rejects the unfounded allegations'.

  12. 2026

  13. Morocco's Competition Council publishes the deal for comment: L'Oréal will buy Kering Beauté S.A.S., which owns Fontaine Ltd, the parent of the Creed group, after Kering's entities licence Bottega Veneta and Balenciaga beauty rights to it.

    Fontainebleau, Seine-et-Marne: where Creed's laboratory makes its perfumes, on the outskirts of Paris

  14. Kering's 2025 results treat Kering Beauté as a discontinued operation, show net debt of €8 billion at the end of 2025 (down €2.5 billion) and propose an exceptional dividend of €1.00 a share tied to the sale.

    Hôpital Laennec, 40 rue de Sèvres, Paris 7e: the 17th- and 18th-century hospital buildings that house the headquarters of Kering and Balenciaga, where Kering's board named Luca de Meo and sold its beauty arm

  15. L'Oréal completes the acquisition of Kering Beauté and House of Creed and signs the 50-year Bottega Veneta and Balenciaga licences; the Gucci rights are to start when the Coty licence ends.

    41 rue Martre, Clichy: L'Oréal's administrative headquarters and the dateline of the joint release ('Paris and Clichy')

  16. Gucci and Coty agree that Coty hands back the Gucci beauty licence a year early for about $400 million; all litigation ends; Kering announces a 50-year Gucci licence for L'Oréal, due to start in mid-2027, with L'Oréal paying about 70 per cent of the cost.

    Rolls Building, Fetter Lane, London: home of the Business and Property Courts, where the Commercial Court has its registry; Coty's subsidiary sued Kering and Gucci in a UK commercial court on 20 October 2025

  17. Kering's half-year results: net debt of €3.3 billion at 30 June, down €4.7 billion since December, with cash of €8.5 billion including the €4.0 billion from the Kering Beauté sale.

    Hôpital Laennec, 40 rue de Sèvres, Paris 7e: the 17th- and 18th-century hospital buildings that house the headquarters of Kering and Balenciaga, where Kering's board named Luca de Meo and sold its beauty arm

  18. L'Oréal's half-year results confirm the Gucci licence for 1 July 2027 and say the Kering Beauté brands, notably Creed, are off to a good start; Creed, Bottega Veneta and Balenciaga have been in L'Oréal's accounts since April.

    41 rue Martre, Clichy: L'Oréal's administrative headquarters and the dateline of the joint release ('Paris and Clichy')