Kering issues €3.8 billion bond “notably” to finance Creed acquisition

French luxury group Kering (owner among others of Gucci, Saint Laurent and Bottega Veneta) has announced the issue of a €3.8 billion bond which is designed to finance the acquisition of perfume brand Creed, an operation whose value has not been disclosed.

In a press release, Kering stated that the bond issue will enable the group to “notably finance the acquisition of Creed,” which had been announced at the end of June. The bond issue is also set to help Kering “enhance its financial flexibility.”

The deal for the acquisition of a 100% stake in Creed, a perfume company that sells exclusive fragrances worldwide, was struck by Kering with the BlackRock Long Term Private Capital (LTPC) fund and Javier Ferrán, chairman of Diageo and BlackRock LTPC.

The value of the operation was not disclosed by Kering, but in July the Financial Times mentioned the sum of €3.5 billion.

Creed was founded in 1760 by James Henry Creed. In June, Kering Beauty’s CEO Raffaella Cornaggia told the press that Creed’s revenue in 2023 was in the region of “€250 million,” as the brand is active on “the extremely buoyant high perfumery market.”

In a press release, Kering underlined that “the great success of this issue with investors underscores the market’s confidence in the credit quality of [Kering].”

The €3.8 billion bond issue is divided into four tranches: one of €1 billion at 8 years, another of €1.3 billion at 12 years, and two €750 million tranches with maturities at two and four years.

The group further stated that “Kering’s long-term debt is rated ‘A’ with a stable outlook by Standard & Poor's.”

Paris, August 29 2023 (AFP)