L’Oreal Expresses Interest in Acquiring Stake in Armani
French cosmetics giant L’Oreal has announced its intention to take a stake in Italian luxury company Armani, as suggested by the brand’s late founder, Giorgio Armani. This move comes amid L’Oreal’s planned acquisition of Kering’s beauty division for $4.6 billion, its largest purchase to date.
According to L’Oreal CEO Nicolas Hieronimus, the acquisition of Kering’s beauty activities does not affect the company’s interest in Armani. Hieronimus stated that L’Oreal could initially take a 15-percent stake in Armani, as specified in Giorgio Armani’s will. Armani’s founder, who passed away on September 4, had valued his company at $5.6 billion and suggested that LVMH, EssilorLuxottica, or L’Oreal could be potential buyers.
The deal between L’Oreal and Kering includes the acquisition of Creed perfume and exclusive licenses to distribute products under Kering’s Italian brands, such as Gucci, Bottega Veneta, and Balenciaga. L’Oreal’s partnership with Kering is expected to demonstrate the company’s value as a potential ally in the luxury sector.
Hieronimus commented that L’Oreal could make the initial investment in Armani alone or with a partner. He expressed his desire to see Armani’s fashion develop under the guidance of its new managing director, Giuseppe Marsocci. The potential acquisition of a stake in Armani could provide an opportunity for L’Oreal to eventually take control of the company by acquiring between 30 and 54.9 percent of its capital.
If such a scenario does not occur within the next three to five years, Giorgio Armani’s will stipulates that the Armani company should be floated on the stock market. L’Oreal is expected to release its third-quarter results, with analysts predicting a 1.5-percent increase in turnover to 10.4 billion euros. The French group’s worth is valued at over $240 billion, solidifying its position as a major player in the luxury sector.
The potential acquisition of a stake in Armani by L’Oreal highlights the company’s strategic expansion into the luxury market. As the cosmetics giant moves forward with its planned acquisition of Kering’s beauty division, its interest in Armani underscores the company’s commitment to growth and development in the high-end segment.
