L'Oréal to acquire YSL Beauté
L'Oréal to acquire YSL Beauté
YSL Beauté reached sales of around 630 million euros in 2006 with its Yves Saint Laurent brand as well as with its Roger&Gallet, Boucheron, Stella McCartney, Oscar de la Renta and Ermenegildo Zegna brands.
"This proposed agreement represents a great opportunity for L'Oréal and its Luxury Products Division. Yves SaintLaurent is a mythical French luxury brand," said Jean-Paul Agon, CEO of L'Oréal. "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."
Added François-Henri Pinault, PPR Chairman & CEO, "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."
The agreement should be signed in the coming weeks, once the institutions representing PPR's staff have been consulted.
This operation will be submitted for approval by the appropriate authorities.
The acquisition was applauded by industry observers.
Mr. Hession went on to note that ideally, from L’Oréal’s point of view, a more U.S. focus would have been nice (70% of YSL sales are in Europe).
"But the opportunity is probably too good to miss," he added. "It would have suited Estée Lauder down to the ground, giving them much needed scale in both Europe and Fragrance at a stroke, but the deal was evidently too rich for them."
While the deal has yet to close, Mr. Hession said another bidder seems unlikely.
"P&G’s Prestige team in Geneva have done well with Boss & Lacoste, but probably need emphasis in their domestic market of North America...but never-say-never in this business."
According to Mr. Hession, "one to watch will be the little jewel that is Roger & Gallet, the only brand in the Personal Wash category which can hold a premium price – lots of potential there for L'Oréal."
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