(Bloomberg) -- L’Oreal SA is considering a potential investment in Omani luxury fragrance company Amouage, according to people familiar with the matter.

The French beauty group has been holding talks on the possible purchase of a minority stake in Amouage, the people said, asking not to be identified because the information is private. Amouage’s owner, the SABCO Group conglomerate, has discussed a valuation of more than €3 billion ($3.2 billion) for the business in any deal, according to the people. 

Amouage was founded in 1983 with a pitch drawing on the sultanate of Oman’s heritage as a cultural crossroads at the center of ancient trading routes for incense and myrrh. Some of its perfumes fetch €365 for a 100-milliliter bottle, according to Amouage’s website. The company sells its products, marketed as “the Gift of Kings,” in about a dozen standalone boutiques and 1,000 other locations including department stores, perfume shops and airports. 

Retail sales at Amouage increased to more than $210 million in 2023, more than doubling over a three-year period. The company is controlled by SABCO, a local business group led by Chairman Sayyid Khalid Bin Hamed Al Busaidi that also has interests in real estate, media, automotive distribution and electrical equipment. 

L’Oreal has pursued a string of acquisitions and licensing deals that have helped it build a stable of cosmetics and perfume brands. The company last year bought Australian cosmetics brand Aesop for an enterprise value of $2.5 billion. 

There’s no certainty the deliberations will lead to a transaction and details of the potential deal could change, the people said. Amouage could also attract interest from other investors. A representative for L’Oreal declined to comment. A spokesperson for SABCO couldn’t immediately comment, while calls to Amouage weren’t answered. 

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L’Oreal shares touched fresh record highs in February, with investors betting that the company’s diverse product range and geographic reach would help it weather a slowing economy. The stock has since slumped, though, after L’Oreal reported disappointing fourth-quarter sales because of a slowdown in sales to Chinese travelers.   

The stock fell 0.4% to €419.80 at 9:15 a.m. Thursday in Paris, valuing the company at €224 billion.

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--With assistance from Angelina Rascouet, Zainab Fattah and Beth Mellor.

(Updates to add stock performance, earnings in seventh paragraph.)

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