4 billion partnership between Kering and L'Oréal in beauty
The company led by Nicolas Hieronimus takes over Maison Creed and obtains the licences for the luxury group's beauty and fragrance products
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The new CEO of Kering is pursuing this goal through a concrete strategy, the cornerstone of which is the agreement signed on Sunday with L'Oreal. The binding agreement sanctions the start of a long-term collaboration in the luxury beauty and wellness sector, which includes the acquisition by L'Oréal of the Maison Creed, as well as the licensing of beauty and fragrance products of the main maisons of the Kering group for 50 years and the creation of an exclusive joint venture to explore business opportunities in the wellness and longevity sector. All this for a revenue for the French luxury group of about 4 billion, which will be paid in cash at the closing of the operation, expected in the first half of next year.
A move that brings decisive relief to Kering's coffers, which had net debt of €9.5 billion as of June 30. In the absence of further divestments, Mediobanca analysts estimate that leverage (the ratio of net debt to Ebitda) could reach 3.5 times (excluding IFRS 16) by December 2025. "Based on the agreed valuation, leverage is expected to fall to 1.5 times on a pro-forma basis by year-end. As of December 2026, pro-forma leverage is expected to fall to 1 times, compared to 2.4 times currently," write Mediobanca.
L’operazione ha un’importante valenza strategica in quanto rappresenta un passo avanti nella riduzione del debito e nella razionalizzazione del gruppo, coerentemente con gli obiettivi espressi dal nuovo ceo al suo insediamento il mese scorso, scrivono gli analisti di Equita, aggiungendo poi. «Inoltre, l’accordo aumenta la visibilità sullo sviluppo delle licenze Beauty per i marchi del gruppo considerato il forte track record di L’Oréal, che tra l’alto gestisce già con successo per il gruppo la licenza perpetua del beauty di Saint Larent». A riguardo nella nota di Kering si legge: «L’accordo rappresenta una nuova fase della collaborazione tra due leader globali dai punti di forza complementari: da un lato, l’expertise di Kering nella gestione di brand iconici del lusso; dall’altro, la leadership mondiale di L’Oréal nel settore della cosmetica. Questa sinergia punta ad accelerare la crescita e a generare valore in categorie ad alt
There was a positive reaction on the Paris Stock Exchange, where Kering closed trading up 4.92% and L'Orèal up 1.2%.
The terms of the understanding
In detail, under the terms of the deal, Kering, which was assisted in the deal by advisors Centerview and Evercore, will have the right to divest L'Oréal Kering Beauté, including the Maison Creed, to L'Oréal. Integrated into the L'Oréal Luxe division, Creed, founded in 1760, will be able to further enhance its global expansion, targeting both female and male customers, the note said.
