• Kering sells beauty division to L'Oréal for $4.6 billion.
• The deal includes fragrances from the House of Creed and long-term licenses for Kering's top fashion brands.
• This strategic shift aims to reduce Kering's debt, projected at €9.5 billion.
• Kering's stock rose over 5% following the announcement of the deal.
• This is the first major action by Kering's new CEO, Luca de Meo.

Kering has finalized an agreement to sell its beauty division to L'Oréal for approximately $4.6 billion, which includes the House of Creed perfume brand. This significant transaction marks a strategic pivot for Kering, focusing on reducing its substantial debt burden, which currently stands at approximately €9.5 billion, according to Times of India, Le Monde, and Los Angeles Times.

Under the terms of the deal, L'Oréal will secure 50-year exclusive licenses to create and distribute beauty products for Kering's prestigious fashion brands, including Gucci, Bottega Veneta, and Balenciaga. This agreement will come into effect following the expiration of Kering's current partnership with Coty in 2028, highlighting a long-term strategic partnership in the luxury beauty and wellness sector, according to Times of India and Los Angeles Times.

This deal signifies a critical shift in Kering's strategy under the leadership of new CEO Luca de Meo, who aims to streamline operations and alleviate financial pressures faced by the company. Following the announcement, Kering's shares surged approximately 5%, reflecting strong market sentiment towards this restructuring move. Analysts suggest this transition is necessary for enhancing margins while reducing capital intensity, according to Le Monde and Los Angeles Times.