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By Tassilo Hummel and Dominique Patton PARIS (Reuters) -Gucci owner Kering said on Sunday it has agreed to sell its beauty business to L'Oreal for 4 billion euros ($4.66 billion), in a major shift in strategy by new CEO Luca de Meo as he moves to tackle the luxury group's high debt and refocus on its core fashion business. Under the deal, French beauty giant L'Oreal will acquire Kering's fragrance line Creed, as well as rights to develop fragrance and beauty products under Kering's fashion labels Gucci, Bottega Veneta and Balenciaga under a 50-year exclusive license. The licence for Gucci fragrances is currently held by Coty and the new 50-year deal with L'Oreal will commence when that expires, believed by analysts to be in 2028. The sale is a significant step towards reducing Kering's net debt, which stood at 9.5 billion euros at the end of June, on top of 6 billion euros in long-term lease liabilities, sparking investor concern.  It is also a major shift in direction by De Meo less than two months after taking the helm, as he unwinds one of the biggest strategic pivots made by his predecessor Francois-Henri Pinault, whose family controls the group, in recent years. Kering set up its beauty business in 2023 after acquiring perfume maker Creed for 3.5 billion euros in an effort to diversify and reduce its reliance on its Gucci brand, which accounts for most of its profits. But the group has struggled to ramp up the business, posting a 60 million euro operating loss for the first half of the year. The company is also battling declining growth at its largest brand Gucci, which was hit hard by slowing demand in the key Chinese market. Gucci's revenue plummeted 25% year-on-year in the last reported quarter, increasing the pressure on Kering to deleverage to avoid further credit downgrades.  "We believe selling Kering Beauté at around the same price paid for Creed two years ago is bitter but necessary medicine," said analysts at Bernstein.  A move back to beauty licensing would be "less capital intensive, less operationally geared, and arguably higher margin", said analysts at RBC, ahead of the deal, even if it has to share revenues with L'Oreal. "We also believe it indicates a strategic re-focus towards its core competencies in soft luxury and any beauty divestment may free up investment headroom towards these priorities, " they wrote in a note to investors. De Meo, who took over as CEO in September, had told shareholders he planned to take some difficult decisions to reduce debt at the group, including rationalising and reorganising where necessary. The company has also postponed a plan to fully acquire Italian fashion brand Valentino, and is aiming to sell stakes in its real estate to raise cash.  L'Oreal, the world's biggest dedicated cosmetics and beauty player, already produces blockbuster perfumes under the Yves Saint Laurent label after acquiring rights to the brand from Kering for 1.15 billion euros in 2008. The two companies also said they were setting up a joint venture to provide experiences and services for luxury clients.  The deal for Kering beauty will be L'Oreal's largest to date, bigger than its purchase of Australian brand Aesop for $2.5 billion in 2023. It is expected to close in the first half of 2026.  "L’Oreal enjoys strong momentum in the Luxe division and they must be looking forward to getting hold of the perfume and beauty licences associated with Kering’s prestigious yet relatively underdeveloped brands," said Bruno-Roland Bernard, a consultant and adjunct professor for corporate finance and luxury management at Paris-based Institut Francais de la Mode.  "It’s also possible they are taking advantage of a favourable bargaining position – with limited competition: who has the credentials and the firepower to deal with a Kering under time pressure?" L'Oreal, which has said there were "plenty" of acquisitions being looked at this year, has also been approached by representatives of Armani Group, Reuters reported this month, after the beauty conglomerate was named in the will of late designer Giorgio Armani as one of the preferred buyers for a minority stake in his fashion house. ($1 = 0.8576 euros) (Reporting by Dominique Patton and Tassilo Hummel in Paris, Anusha Shah in Bengaluru; Editing by Edmund Klamann, Diane Craft and Lincoln Feast.)

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By Joe Cash BEIJING (Reuters) -China's exports of rare earth magnets fell in September, reigniting fears that the world's top supplier could wield its dominance over a component key for U.S. defence firms and makers of items from cars to smartphones as leverage in trade talks. In April and May, Beijing squeezed global automakers with export curbs on a range of rare earths items and related magnets, while negotiators faced off over triple-digit U.S. tariffs on goods from the world's second-largest economy. Four months on, after Washington and Beijing unexpectedly reprised threats of fresh tariffs and rare earth export curbs, worry is growing that China could return to the same playbook. That would mean it reneges on a June deal with the United States to ease the flow of critical minerals. China's shipments of rare earth magnets fell 6.1% in September from August, customs data showed on Monday, ending three months of gains, and dropping even before Beijing unveiled a dramatic expansion of its export licensing regime this month. "The sharp swings in rare earth magnet exports show that China knows it holds a key card in international trade talks," said Chim Lee, senior analyst at the Economist Intelligence Unit. EXPORTS FALL FROM AUGUST'S SEVEN-MONTH HIGH The September fall to 5,774 tons from a seven-month high of 6,146 tons in August aligns with reports that China is already making it harder for firms to secure licences for exports of rare earth magnets. Its commerce ministry is applying scrutiny similar to that seen in April, at the height of the trade war. On an annual basis, September shipments rose 17.5%. Last week, China's commerce ministry accused the United States of stoking global panic over its rare earth controls by deliberately misunderstanding the curbs, and said it would approve export licences intended for civilian use. Still, analysts worry China could once again entangle civilian commercial users in curbs aimed at choking U.S. defence firms' access to critical materials. "China's ability to throttle rare earth exports is an exceptionally powerful tool," said Dan Wang, China director at Eurasia Group. Apart from disrupting production, such measures would fuel insecurity over access to critical industrial inputs and growing reliance on China, she added. "The world has to adjust to its management style," she said, adding that Western countries are not used to complying with a monopolistic control of critical resources from countries on 'the other side'. By country, Germany, South Korea, Vietnam, the United States and Mexico were the top five export destinations for Chinese rare earth magnets by volume last month. Over the nine months of the year, exports of such magnets totalled 39,817 tons, a fall of 7.5% from the corresponding 2024 period. NO SIGN OF BEIJING BACKING DOWN Shipments to the United States fell 28.7% in September on the month, the data showed, while exports to Vietnam rose 57.5% over the same period. The Netherlands processed 109% more rare earth magnets than in August, though the figure is skewed by the huge Rotterdam port, a major transit hub for Europe-bound trade. Just before the release of the data, President Donald Trump told reporters aboard Air Force One that he did not want China to "play the rare earth game with us". He suggested he might hold off on raising tariffs back to levels in excess of 100% if the world's top agricultural buyer committed to purchasing U.S. soybeans. But Beijing shows no sign of backing down, adamant that its new wider curbs, set to take effect just days before the November 10 expiry of the latest 90-day tariff truce with the United States, are consistent with measures in other major economies. President Xi Jinping is set to meet Trump in South Korea later this month, but economists warn that trade friction between the two biggest economies may be the new normal. "The surge in exports during the third quarter came after it (China) eased export controls earlier in the year, but that's likely to drop again following the tighter restrictions introduced recently," added EIU analyst Chim Lee. (Reporting by Joe Cash and Beijing Newsroom; Editing by Christopher Cushing and Clarence Fernandez)

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ABOARD AIR FORCE ONE (Reuters) -U.S. President Donald Trump reiterated on Sunday that Indian Prime Minister Narendra Modi told him India will stop buying Russian oil, while warning that New Delhi would continue paying "massive" tariffs if it did not do so. "I spoke with Prime Minister Modi of India, and he said he's not going to be doing the Russian oil thing," Trump told reporters aboard Air Force One. Asked about India's assertion that it was not aware of any conversation between Modi and Trump, Trump replied: "But if they want to say that, then they'll just continue to pay massive tariffs, and they don't want to do that." Russian oil has been one of the main irritants for Trump in prolonged trade talks with India – half of his 50% tariffs on Indian goods are in retaliation for those purchases. The U.S. government has said petroleum revenue funds Russia’s war in Ukraine. India has become the biggest buyer of seaborne Russian oil sold at a discount after Western nations shunned purchases and imposed sanctions on Moscow for its 2022 invasion of Ukraine. Trade talks between India and the U.S. are going on in a "congenial" manner, an Indian government official said on Saturday, declining to be identified due to the sensitivity of talks. An Indian delegation which was in the U.S. last week for talks has returned, the official said, declining to share further details. An email to India's trade ministry was not immediately answered on Monday, which was a public holiday. Trump on Wednesday said Modi had assured him that day that India would stop its Russian oil purchases. India's foreign ministry said it was not aware of any telephone conversation between the leaders that day, but said that New Delhi's main concern was to "safeguard the interests of the Indian consumer." A White House official said on Thursday that India has halved its purchases of Russian oil, but Indian sources said no immediate reduction had been seen. The sources said Indian refiners already placed orders for November loading, including some slated for December arrival, so any cut may start showing up in December or January import numbers. India's imports of Russian oil are set to rise about 20% this month to 1.9 million barrels per day, according to estimates from commodities data firm Kpler, as Russia ramps up exports after Ukrainian drones hit its refineries. (Reporting by Jeff Mason Aboard Air Force One and Kanishka Singh and David Brunnstrom in Washington; Additional reporting by Manoj Kumar in New Delhi; Editing by Kim Coghill and Sonali Paul)

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(Refiles to fix links to earlier stories in copy; no change to text) PARIS(Reuters) -Gucci owner Kering said on Sunday it has agreed to sell its beauty business to L'Oreal for 4 billion euros ($4.66 billion), as new CEO Luca de Meo moves to tackle the luxury group's high debt and refocus on its core fashion business. Under the deal, French beauty giant L'Oreal will acquire Kering's fragrance line Creed, as well as rights to develop fragrance and beauty products under Kering's fashion labels Gucci, Bottega Veneta and Balenciaga under a 50-year exclusive license. The licence for Gucci fragrances is currently held by Coty and the new deal will commence when that expires, believed by analysts to be in 2028. The sale is a major step towards reducing Kering's net debt, which stood at 9.5 billion euros at the end of June, on top of 6 billion euros in long-term lease liabilities which have sparked investor concern. The company has struggled to reverse declining growth at its largest brand Gucci, which was hit hard by slowing demand in the key Chinese market. With the deal struck less than two months after taking over the helm, de Meo is unwinding one of the biggest strategic pivots made by his predecessor Francois-Henri Pinault, whose family controls the group, in recent years. Kering set up its beauty business in 2023 after acquiring perfume maker Creed for 3.5 billion euros in an effort to diversify and reduce its reliance on its Gucci brand, which accounts for most of its profits. But the group has struggled to ramp up the business, posting a 60 million euro operating loss for the first half of the year. Gucci's revenue meanwhile plummeted 25% year-on-year in the last reported quarter, increasing the pressure on Kering to deleverage to avoid further credit downgrades.  De Meo, who took over as CEO in September, had told shareholders he planned to take some difficult decisions to reduce debt at the group, including rationalising and reorganising where necessary. L'Oreal, the world's biggest dedicated cosmetics and beauty player, already produces blockbuster perfumes under the Yves Saint Laurent label after acquiring rights to the brand from Kering for 1.15 billion euros in 2008.  The deal for Kering beauty will be L'Oreal's largest to date, bigger than its purchase of Australian brand Aesop for $2.5 billion in 2023. L'Oreal, which said there were "plenty" of acquisitions being looked at this year, has also been approached by representatives of Armani Group, Reuters reported this month, after the beauty conglomerate was named in the will of late designer Giorgio Armani as one of the preferred buyers for a minority stake in his fashion house. ($1 = 0.8576 euros) (Reporting by Dominique Patton and Tassilo Hummel in Paris, Anusha Shah in Bengaluru; Editing by Edmund Klamann, Diane Craft and Lincoln Feast.)

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ABOARD AIR FORCE ONE (Reuters) -U.S. President Donald Trump reiterated on Sunday that Indian Prime Minister Narendra Modi told him India will stop buying Russian oil, while warning that New Delhi would continue paying "massive" tariffs if it did not do so. "I spoke with Prime Minister Modi of India, and he said he's not going to be doing the Russian oil thing," Trump told reporters aboard Air Force One. Asked about India's assertion that it was not aware of any conversation between Modi and Trump, Trump replied: "But if they want to say that, then they'll just continue to pay massive tariffs, and they don't want to do that." Russian oil has been one of the main irritants for Trump in prolonged trade talks with India – half of his 50% tariffs on Indian goods are in retaliation for those purchases. The U.S. government has said petroleum revenue funds Russia’s war in Ukraine. India has become the biggest buyer of seaborne Russian oil sold at a discount after Western nations shunned purchases and imposed sanctions on Moscow for its 2022 invasion of Ukraine. Trade talks between India and the U.S. are going on in a "congenial" manner, an Indian government official said on Saturday, declining to be identified due to the sensitivity of talks. An Indian delegation which was in the U.S. last week for talks has returned, the official said, declining to share further details. An email to India's trade ministry was not immediately answered on Monday, which was a public holiday. Trump on Wednesday said Modi had assured him that day that India would stop its Russian oil purchases. India's foreign ministry said it was not aware of any telephone conversation between the leaders that day, but said that New Delhi's main concern was to "safeguard the interests of the Indian consumer." A White House official said on Thursday that India has halved its purchases of Russian oil, but Indian sources said no immediate reduction had been seen. The sources said Indian refiners already placed orders for November loading, including some slated for December arrival, so any cut may start showing up in December or January import numbers. India's imports of Russian oil are set to rise about 20% this month to 1.9 million barrels per day, according to estimates from commodities data firm Kpler, as Russia ramps up exports after Ukrainian drones hit its refineries. (Reporting by Jeff Mason Aboard Air Force One and Kanishka Singh and David Brunnstrom in Washington; Additional reporting by Manoj Kumar in New Delhi; Editing by Kim Coghill and Sonali Paul)

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By Kevin Yao and Ellen Zhang BEIJING (Reuters) -China's economic growth slowed to the weakest pace in a year in the third quarter as fragile domestic demand left it heavily reliant on manufacturing production and exports, stoking concerns about deepening structural imbalances. The economy's overreliance on exports at a time of mounting trade tensions with Washington is also raising questions over whether Beijing has the resolve to tackle critical policy challenges to foster longer term sustainable growth. These concerns remain on the forefront of China's policy deliberations even as Monday's GDP figures showed forecast-matching growth of 4.8% in the third quarter, keeping the economy on track to expand by roughly 5% this year, potentially with the help of more stimulus. "With China on track to hit this year's growth target, we could see less policy urgency," said Lynn Song, chief economist, Greater China at ING. "But weak confidence translating to soft consumption, investment, and a worsening property price downturn still need to be addressed." Beijing may be using the headline resilience in growth as a show of strength in upcoming talks between its vice premier He Lifeng and Treasury Secretary Scott Bessent in Malaysia this week and a potential meeting between presidents Donald Trump and Xi Jinping in South Korea later. The recent export data also highlights China's ability to diversify away from the U.S. market, the world's largest consumer economy. Its U.S. export sales were down 27% year-on-year last month, but shipments to the European Union, Southeast Asia and Africa grew by 14%, 15.6% and 56.4%, respectively. Still, the sluggish domestic market remains a drag for businesses with Monday's data showing retail sales slowing to a 10-month low. The third-quarter gross domestic product growth lagged the 5.2% pace in the second quarter but was in line with a Reuters poll forecast for a rise of 4.8%. The economy grew 5.2% year-on-year in January-September, the National Bureau of Statistics data showed, suggesting growth is on track to hit the government's annual target of around 5%. On a quarterly basis, GDP grew 1.1% in the third quarter, compared with a forecast 0.8% increase and a revised 1.0% gain in the previous quarter. TRADE RIFT HIGHLIGHTS WEAKNESS IN LOPSIDED ECONOMY Renewed trade tensions with Washington have highlighted the vulnerabilities of China's lopsided economy, raising expectations that Chinese leaders may embrace painful changes to rebalance growth towards domestic consumption. While China's export growth rebounded in September, much of the recent data show the world's second-largest economy has lost momentum, and deflationary pressures have persisted despite efforts to curb overcapacity and fierce competition. Moreover, manufacturers' sales abroad to non-U.S. countries come at the cost of profitability due to intense competition on price, making it hard to sustain unless trade tensions tone down. Jeremy Fang, a sales officer at a Chinese aluminium products maker, says his firm lost 20% of revenue as higher sales in Latin America, Africa, Southeast Asia, Turkey and the Middle East failed to fully offset an 80%-90% order plunge in the U.S.    Fang said he is learning Spanish to get ahead of his Chinese competitors rushing to non-U.S. markets and is now travelling abroad twice more often than he did last year.    But that extra effort isn’t enough.    "You have to be ruthlessly competitive on price," Fang said. "If your price is $100 and the customer starts bargaining, it's better to drop $10-$20 and take the order. You can't hesitate." Trump has threatened to raise tariffs on Chinese goods by an additional 100% starting November 1. However, U.S. officials have signalled that both countries are prepared to lower the temperature in their tariff spat. CHINA'S FIVE-YEAR PLAN IN FOCUS Chinese leaders will hold a closed-door meeting from Monday through to Thursday to discuss, among other things, the country's 15th five-year development plan, which is expected to prioritise high-tech manufacturing in the wake of the intensifying rivalry with the United States. Investors are also looking to a Politburo meeting and the Central Economic Work Conference, expected in December, for clues on economic policy for next year. The prolonged crisis in the property market, with latest figures showing investment in the sector down 13.9% in the first three quarters year-on-year, has weighed heavily on growth and consumer confidence in China. Authorities have unveiled modest stimulus measures this year, and while there is room for additional support, analysts are divided over whether policymakers will act this year. "I don't think there will be additional consumption-focused stimulus. The focus of policy is long-term, including pension reform, which will improve consumption in the future, but will reduce it more immediately due to layoffs and people having less cash in hand," Dan Wang, China director at Eurasia Group. Separate September data, which were also released on Monday, showed industrial output grew to a three-month high of 6.5% year-on-year, accelerating from 5.2% growth in August and beating a forecast of 5.0%. Retail sales rose 3.0% in September, the slowest pace in 10 months, from 3.4% in August and matching a forecast 3.0% rise. Fixed-asset investment shrank 0.5% in January-September from a year earlier, reversing a 0.5% rise in the first eight months for its first contraction since the pandemic. (Reporting by Ellen Zhang and Kevin YaoEditing by Shri Navaratnam)

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