French luxury group Kering, known for its ownership of prestigious brands like Gucci, Saint Laurent, and Bottega Veneta, has recently announced the issuance of a €3.8 billion bond. The primary purpose of this bond is to finance the acquisition of Creed, a renowned perfume brand. However, Kering also aims to enhance its financial flexibility through this transaction.
The acquisition deal for Creed was made between Kering and the BlackRock Long Term Private Capital (LTPC) fund, along with Javier Ferrán, chairman of Diageo and BlackRock LTPC. While the exact value of the operation has not been disclosed by Kering, there were reports in July suggesting it to be around €3.5 billion.
Founded in 1760 by James Henry Creed, Creed is a global perfume company that is synonymous with exclusivity and luxury. Raffaella Cornaggia, CEO of Kering Beauty, revealed that Creed generated approximately €250 million in revenue in 2023. The brand has achieved remarkable success in the high-end perfumery market.
The successful issuance of the €3.8 billion bond reflects the market’s confidence in Kering’s credit quality, as emphasized by the company. The bond is divided into four tranches, with a maturity of 8 years for €1 billion, 12 years for €1.3 billion, and two tranches of €750 million with maturities of 2 and 4 years, respectively.
Adding to its financial strength, Kering’s long-term debt has been assigned an ‘A’ rating by Standard & Poor’s, with a stable outlook. This rating signals the company’s robust financial position.
In summary, the issuance of the €3.8 billion bond represents a significant milestone for Kering as it secures funding for the acquisition of Creed. Through this strategic move, Kering aims to further bolster its luxury brand portfolio and capitalize on the thriving high-end perfume market.
Additional Links:
1. Kering Sustainability Roadmap
2. Kering 2020 Unabridged Annual Report
