Kering Said to Discuss €4 Billion Sale of Beauty Unit to L’Oreal

<p>The deal could be announced as soon as next week.</p> — The deal could be announced as soon as next week.

(Bloomberg) -- Kering SA is in talks to sell its beauty business to L’Oréal SA in a deal worth about €4 billion ($4.7 billion), according to people with knowledge of the matter, as new Chief Executive Luca de Meo seeks to turn around the luxury giant’s fortunes.

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The deal could be announced as soon as next week, although discussions could still fall apart, the people said, asking not to be identified because the information is private.

Kering declined to comment, while L’Oreal, which owns Garnier and Maybelline New York, didn’t immediately respond to a request for comment. The discussions were earlier reported by the Wall Street Journal.

A potential sale of Kering’s beauty business would be the first strategic move under de Meo, as he confronts a slump in Chinese demand and the threat of higher US tariffs. The CEO, who took over the role last month from Francois-Henri Pinault, is expected to unveil his strategic vision next spring.

Earlier this year, Pinault announced he would step down as CEO after a series of profit warnings at the luxury group founded by his father Francois Pinault. The Pinaults are the majority shareholders of Kering with a 42% stake and 59% of voting rights.

The owner of fashion brands including Gucci, Bottega Veneta, Saint Laurent and Balenciaga launched its beauty division in 2023. The company acquired cologne maker Creed that year for an estimated €3.5 billion to build its beauty platform, but it has been dealing with more pressing issues ever since.

--With assistance from Natasha Voase and Claudia Cohen.

(Retops with new details.)