L'Oreal to buy YSL Beaute from PPR

by Grant Osborne, 23 January 2008

L'Oreal are negotiating with PPR's Gucci Group to buy YSL Beaute Holdings. The deal would see L'Oreal obtain long-term fragrance licensing deals for brands including Yves Saint Laurent and Boucheron.

The deal, expected to be worth 1.15 billion euros, will mean the transfer of fragrance licenses to L'Oreal for YSL, Boucheron, Zegna, Stella McCartney and Oscar de la Renta as well as YSL Beaute subsidary, Roger & Gallet. No mention was made in the press release of Alexander McQueen, though it is expected to be included.

PPR's Gucci Group acquired the fragrance business from Sanofi in 1999, and renamed it YSL Beaute the following year.

The Yves Saint Laurent, Boucheron and Stella McCartney brands remain the property of the PPR Group.

Francois-Henri Pinault, PPR Chairman & CEO, said: "With this strategic agreement with the world leader in cosmetics, Gucci Group gives YSL Beaute the opportunity to take full advantage of its upside potential. It also enables the Yves Saint Laurent brand, in the field of beauty, to fully align its ambition with its worldwide reputation. Yves Saint Laurent would thus boost its position as a great luxury brand. With its expertise and knowledge of international markets, L'Oreal would be able to continue and step up the work already achieved to date. L'Oreal would also offer a unique development platform for the Roger & Gallet, Boucheron, Stella McCartney, Oscar de la Renta and Zegna brands. With this projected agreement, PPR reasserts its ambition to bolster the development of the Gucci Group's brands."

Jean-Paul Agon, L'Oreal's CEO, stated: "This proposed agreement represents a great opportunity for L'Oreal and its Luxury Products Division. Yves Saint Laurent is a mythical French luxury brand. It is admired the world over and is particularly complementary with our current brands. We are convinced that its integration into our Luxury Products Division would speed up its development. This strategic agreement will reinforce our position in the luxury cosmetics market."

The transaction is expected to be signed in the coming weeks.