Luxury goods firm Kering has agreed to sell its beauty division to L’Oreal for a total of $4.7 billion, as per an official press release.
The terms of the agreement allow L’Oreal to acquire Kering Beuate, including the brand House of Creed. The partnership also gives license rights to create products for Gucci, Bottega Veneta, and Balenciaga, which is expected to run for a total of 50 years.
The deal will be all-cash, and L’Oreal will pay royalties to Kering for use of its brands.
“Joining forces with the global leader in beauty, we will accelerate the development of fragrance and cosmetics for our major Houses, allowing them to achieve scale in this category and unlock their immense long-term potential, as did Yves Saint Laurent Beauté under L’Oréal’s stewardship,” said Kering CEO Luca De Meo.
L’Oreal Groupe CEO Nicolas Hieronimus said that the addition of the new brands will complement the company’s existing portfolio and expand its reach into new segments of luxury beauty.