With input from Axios and Bloomberg.
L’Oréal is going big-game hunting in fragrance — and just bagged a trophy. The French cosmetics giant agreed to buy Kering’s beauty unit, including cult perfume house Creed, in an all-cash deal worth €4 billion. It’s the biggest acquisition in L’Oréal’s 116-year history and a clear swing to bulk up its high-end scent lineup.
For Kering, the sale is about slimming down and refocusing on fashion while chipping away at debt. The group paid €3.5 billion for Creed in 2023; analysts at Berenberg reckon today’s transaction values Creed at roughly €2.5 billion, implying a hefty write-down, while the Gucci beauty license embedded in the package is worth around €1.5 billion. The market didn’t flinch — Kering shares jumped as much as 5.5% in Paris, with Santander estimating leverage drops to about 1.5x EBITDA from 2.3x at year-end.
The headline isn’t just ownership of Creed; it’s the runway L’Oréal gets. The company secures 50-year licenses to develop fragrances and other beauty products for Bottega Veneta and Balenciaga, plus Gucci once Coty’s existing agreement lapses — no later than 2028, per deal terms. Beyond the upfront cash, L’Oréal will pay royalties to Kering for those licenses, and the two groups are also forming a 50/50 joint venture to chase opportunities in luxury, wellness and longevity.
Strategically, the move says two things. First, L’Oréal is happy to pounce when marquee assets are within reach at prices it likes — Chairman Jean-Paul Agon has been circling a beauty tie-up with Kering since last year, and talks sped up in September. Second, while beauty dealmaking has lately obsessed over “mass-tige,” there’s still serious money (and margin) at the top shelf. Creed’s global cachet, paired with decades-long rights to Kering’s fashion houses, gives L’Oréal’s Luxe division — run by Cyril Chapuy — years of innovation shots on goal.
It also extends an acquisition streak. After buying Aēsop in 2023 for about $2.5 billion, L’Oréal picked up Korea’s Dr. G, a majority of Medik8, and minority stakes in Amouage, Jacquemus, and Galderma. Investors are watching a separate chessboard too: the post-founder future of Giorgio Armani SpA. L’Oréal already holds the Armani beauty license through 2050 and was named a preferred buyer for an initial stake alongside EssilorLuxottica and LVMH.
As for Kering, new CEO Luca de Meo is pruning to protect the core after a spending spree and soft patch at Gucci. Offloading beauty brings in cash, trims leverage, and lets the group concentrate on rebooting its fashion engines.
The deal is slated to close in the first half of 2026, subject to approvals. Bank of America, Rothschild and PVC PH. Villin Conseil advised L’Oréal; Kering worked with Centerview and Evercore. For now, the takeaway is simple: L’Oréal just bought itself decades of luxury fragrance runway — and reminded everyone that true prestige still sells.
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