The formal offer, which represents the enterprise value of YSL, will also give L’Oréal the Roger & Gallet brand as well as licences for Yves Saint Laurent and Boucheron in perfumes and cosmetics. The YSL group has annual sales of €626m.

The move comes as L’Oréal tries to boost its sales growth, which has fallen below its target range of 6-8 per cent for the past two years. Analysts expect L’Oréal this year to achieve organic growth of 7.5 per cent.

Jean-Paul Agon, L’Oreal’s chief executive, said the integration of YSL Beauté into the group’s luxury products division would “speed up its development” and help strengthen its luxury cosmetics sales.

News of the deal, which comes as L’Oréal prepares to announce its fourth-quarter earnings on Thursday, puts an end to months of speculation over the future of YSL Beauté.

PPR will retain ownership of the Yves Saint Laurent, Boucheron and Stella McCartney brands, but their perfumes and cosmetics will be made by L’Oréal under long-term licence.