L’Oréal signals intent to acquire a stake in Armani while finalising a USD 4.6 billion purchase of Kering’s beauty unit
French cosmetics company L’Oreal has reaffirmed its interest in acquiring a stake in the Italian luxury fashion house Armani, even as it moves forward with a multibillion-dollar purchase of Kering’s beauty business, as per AFP reports.
Chief Executive Nicolas Hieronimus said that L’Oreal’s acquisition of Kering’s beauty division “changes nothing” regarding its intention to invest in Armani. L’Oreal is also set to acquire Kering’s beauty operations for USD 4.6 billion, its largest takeover to date.
The deal gives L’Oreal ownership of Kering’s Creed perfume and secures 50-year exclusive distribution rights for beauty lines under Kering’s luxury brands Gucci, Bottega Veneta, and Balenciaga, once existing licences with US company Coty expire in 2028.
Giorgio Armani, who passed away on 4 September, had stipulated in his will that a major luxury group should acquire a 15 per cent stake in his privately held company, valued by Forbes at USD 5.6 billion. He had named LVMH, EssilorLuxottica, and L’Oreal as possible investors.
Hieronimus said he envisaged an initial 15 per cent investment in Armani, adding that the collaboration with Kering demonstrates L’Oreal’s strength as a partner in the high-end fashion and beauty market.
The CEO also noted that the company could make the Armani investment either independently or with another partner. He expressed his hope that Armani would continue to evolve under the creative leadership of its new managing director, Giuseppe Marsocci, with whom he shares a long professional association.
Should an acquisition of between 30 and 54.9 per cent not materialise within three to five years, Armani will call for the company to be listed on the stock exchange.
L’Oreal, valued at over USD 240 billion, was scheduled to release its third-quarter results later on Tuesday, with analysts predicting a 1.5 per cent rise in sales to USD 10.4 billion (USD 12 billion).
