L’Oréal Paris will acquire Kering Beauty and Wellness in a four billion euro deal that is expected to be consolidated in the following year. The Sunday announcement by both the companies in Paris and Clichy, France mentioned a binding agreement between the two global leaders.

The new combination of luxury and exquisite products from the family led House of Kering with the global market leader in beauty expertise, L’Oreal has the potential to unlock greater value in beauty, fragrance and wellness markets for both the firms.

Gucci owner Kering is facing debt and CEO Luca de Meo wants to refocus on its core business which is fashion. So, it is is selling fragrance line Creed and is also giving L’Oréal exclusive rights for the development of fragrances and beauty products for 50 years using its established brands such as Bottega, Veneta and Balenciaga.

CEO Luca de Meo said in a company press release, “This strategic alliance marks a decisive step for Kering.”

He also called L’Oréal the global leader in beauty and said that Kering would accelerate the development of fragrances as well as cosmetics. He also mentioned how Yves St. Laurent Beauté had progressed under the stewardship of L’Oréal.

Nicolas Hieronimus, the CEO of L’Oréal Groupe said, “I am delighted to forge this long-term strategic alliance with one of the world’s most prestigious, creative and visionary luxury groups.”

The agreement is subjected to regulations and is expected to come into force next year. Both the groups will also create an exclusive venture that will focus on wellness and longevity after the agreement passes all the regulatory requirements.

CWEB analysts say that the current deal will mitigate some of the concerns of investors in the Kering group as the net debt of the company at the end of June was $10.5 billion. The firm also has $7 billion in long term lease liabilities. The partnership is bound to bring more success and financial well-being to both the Kering group and L’Oréal.