Estee Lauder and Spanish company Puig have terminated talks for a multibillion-dollar merger that would have created one of the world's largest luxury beauty businesses. The deal, which had been the subject of months of speculation, was valued at approximately $40 billion and aimed to create a premium beauty player capable of competing more effectively with sector leader L'Oreal.
The merger failed after the companies could not agree on which family would hold the balance of power within the combined group. A successful deal would have put brands such as MAC, Clinique, Bobbi Brown, Charlotte Tilbury, and Tom Ford Beauty under the same roof as Puig's portfolio, which includes Nina Ricci, Jean Paul Gaultier, and Dr. Barbara Sturm.
Estee Lauder CEO Stéphane de La Faverie expressed gratitude for the conversations with Puig but reiterated the company's confidence in its strength as a standalone entity. This comes as the New York-based company transforms its operating model to be leaner, faster, and more agile, potentially cutting up to 7,000 jobs, or more than 11% of its workforce, by fiscal 2026.
Following the announcement, Estee Lauder's shares saw a significant increase, jumping over 10% in premarket trading and more than 12% in early trading Friday. Conversely, shares of Puig, which went public on the Madrid Stock Exchange in early 2024, fell more than 14% in European morning trading.