L’Oréal starts three-part euro bond sale for Kering Beauté deal

The Kering Beauté acquisition marked the latest in a string of deals for the beauty giant

L’Oréal is selling at least 1.5 billion euros (S$2.26 billion) of bonds in a three-part deal to help finance its acquisition of Kering Beauté.

The beauty company is offering a two-year floating-rate note, a five-year fixed-rate note and a long 10-year fixed-rate bond, according to a person familiar with the matter who asked not to be identified.

L’Oréal agreed to buy Kering’s beauty division last month, with the Gucci owner set to receive 4 billion euros in cash at closing of the deal, which is expected in the first half of next year, as well as royalties from L’Oréal.

The Kering Beauté acquisition marked the latest in a string of deals for the beauty giant. L’Oréal bought Aēsop in 2023 at an enterprise value of about US$2.5 billion, and recently purchased South Korean brand Dr G, a majority stake in Medik8, and minority stakes in firms including Omani high-end fragrance maker Amouage.

The two-year floating-rate note is being offered at 45 basis points over three-month euribor while the five-year bond is in the area of 70-75 basis points over midswaps. The long 10-year bond is being marketed at 100-105 basis points over midswaps.

The bonds are expected to be rated Aa1 and AA by Moody’s Ratings and S&P Global Ratings respectively, and may price later today. BLOOMBERG

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