PPR; L'Oréal to Enter Strategic Agreement

PPR announced that it has received an offer from L'Oréal to enter a strategic agreement in which L'Oréal would receive long-term exclusive worldwide licenses for use of the Yves Saint Laurent and Boucheron brands. The offer also stipulates that licenses for fragrances and cosmetics of the Stella McCartney, Oscar de la Renta and Ermenegildo Zegna brands would be transferred to L'Oreal and shares of YSL Beaute Group—including its Roger & Gallet subsidiary—would be sold to L'Oréal for an enterprise value of €1,150 million. The Yves Saint Laurent, Boucheron and Stella McCartney brands remain the property of PPR.

"With this strategic agreement, YSL Beaute [has] 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," said Francois-Henri Pinault, chairman and CEO, PPR. "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 Mc Cartney, Oscar de la Renta and Zegna brands. With this projected agreement, PPR reasserts its ambition to bolster the development of [its] Gucci Group's brands."

"This proposed agreement represents a great opportunity for L'Oreal and its luxury products division," said Jean-Paul Agon, CEO, L'Oreal. "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."

A signed transaction is expected within the next weeks, following consultation of personnel representative bodies, and will be submitted to the approval of competition authorities.
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