French luxury powerhouse Kering has announced the sale of its beauty division to L’Oréal for €4 billion ($4.66 billion), marking a major strategic pivot aimed at reducing debt and sharpening focus on its core fashion business.

Under the landmark deal:

– L’Oréal acquires the prestigious fragrance brand House of Creed.

– It secures 50-year exclusive licenses to develop and market beauty products for Kering’s iconic fashion labels—Gucci, Bottega Veneta, and Balenciaga—starting after Kering’s current Coty partnership ends in 2028.

– The two companies will form a strategic committee to coordinate brand development and explore joint ventures in wellness and longevity.

This move is the first major initiative under Kering’s new CEO Luca de Meo, who is steering the group through slowing Chinese demand and rising U.S. tariffs.

The alliance signals a deeper convergence between luxury fashion and wellness innovation. Analysts expect L’Oréal to leverage its R&D muscle to elevate Kering’s beauty offerings, while Kering refocuses on fashion-led growth.