French luxury group Kering, owner of fashion brand Gucci, is nearing a sale of its beauty division to L’Oreal, according to two people familiar with the situation.
One of the sources confirmed the deal would be worth around $4 billion, as per an earlier report by the Wall Street Journal, which was first to report the development.
L’Oreal, the world's biggest dedicated cosmetics and beauty player, would acquire fragrance brand Creed and gain rights to develop beauty products tied to Kering’s fashion labels, including Bottega Veneta, Balenciaga, and McQueen, the WSJ reported, adding the deal could be announced next week.
Kering, controlled by the French Pinault family, launched its beauty division in 2023, the year it acquired high-end fragrance label Creed for 3.5 billion euros ($4 billion) in cash.
Kering declined to comment and L'Oreal did not immediately respond to a Reuters request for comment.
A sale would be a major step forward by new CEO Luca De Meo, who officially took office in September, to address a high-debt issue that had sparked investor anxiety.
Since Kering announced De Meo's appointment in mid-June, shares in the company have surged by around 60%.
L'Oreal has also been approached by representatives of Armani Group, Reuters reported this month, after the beauty conglomerate was named in the will of late designer Giorgio Armani as one of the preferred buyers for a minority stake in his fashion house.
