L’Oreal SA has agreed to buy Kering SA’s beauty division in a $4.7 billion deal, as Kering’s new chief executive, Luca de Meo, is changing course to try to turn around his company’s fortunes.

The transaction includes the sale of perfume maker House of Creed, which Kering bought only two years ago. The two companies also said they’ll work together to create, develop and distribute fragrance and beauty products for Kering’s Gucci, Bottega Veneta and Balenciaga brands.

The move reverses Kering’s previous plan to bulk up and take direct control of its beauty and cosmetics segment and push into the high-end fragrance segment where rivals Hermes International and LVMH Moet Hennessy Louis Vuitton SE have performed strongly.

Kering will receive €4 billion in cash at closing of the deal, which i

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