“This proposed agreement represents a great opportunity for L’Oréal and its Luxury Products Division.“
FRANCE. In a development that will rock the beauty industry, French house L’Oréal is set to acquire YSL Beauté Holding from current owner PPR.
It will also gain extensive licensing rights to a number of key brands, including Yves St Laurent, Boucheron, Stella McCartney, Oscar de la Renta and Ermenegildo Zegna.
Announcing the deal late today L’Oréal said that it has made a firm offer to PPR to acquire the shares of YSL Beauté Holding including the Roger&Gallet brand, for €1,150 million in terms of Enterprise Value. PPR said it has granted exclusive negotiation rights to L’Oréal.
The latter will obtain an exclusive and “very long-term” worldwide licence for the use of the Yves Saint Laurent and Boucheron brands in the category of perfumes and cosmetics.
L’Oréal will also take over the licences for the Stella McCartney, Oscar de la Renta and Ermenegildo Zegna brands, in the category of perfumes and cosmetics.
YSL Beauté reached sales of around €630 million in 2006, driven by its Yves Saint Laurent brand as well as Roger&Gallet, Boucheron, Stella McCartney, Oscar de la Renta and Ermenegildo Zegna.
L’Oréal CEO Jean-Paul Agon said: “This proposed agreement represents a great opportunity for L’Oréal 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”.
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PPR Chairman & CEO FranÃ§ois-Henri Pinault said: “With this strategic agreement with the world leader in cosmetics, Gucci Group gives YSL Beauté 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’Oréal would be able to continue and step up the work already achieved to date.
“L’Oréal 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.”
L’Oréal said the agreement should be signed “in the coming weeks”, once the institutions representing PPR’s staff have been consulted.
The deal is subject to statutory approval.
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