(Corrects to remove reference to Dolce & Gabbana, a licence now owned by Japan's Shiseido and not Coty)
PARIS, May 28 (Reuters) - L'Oreal will produce fragrances and cosmetics for Italian fashion label Valentino, enhancing its perfumes business by winning a licence previously held by Spain's Puig.
The French beauty firm's luxury products division already makes fragrances and cosmetics for Armani and Saint Laurent as well as its own labels such as Lancome.
It is competing with U.S. cosmetics group Coty which became the world's leading perfume producer by buying Procter & Gamble's beauty division in 2015, and also has licences for brands like Gucci or Hugo Boss.
"L'Oreal aims to become the world leader in perfumes. This license should allow us to reach that goal," a spokeswoman said.
L'Oreal did not disclose the terms of the agreement, which will become effective from 2019, after regulatory approvals. The contract with Puig was due to expire at the end of 2018. (Reporting by Pascale Denis, Writing by Sarah White, Editing by Alexander Smith)