Shares of Estee Lauder (NYSE:EL) fell by over 4% on Monday afternoon following a report in the Financial Times that the cosmetics giant is in advanced talks to combine with Spanish beauty group Puig. According to people cited by the Financial Times, the proposed transaction would produce a combined company with a valuation in excess of $40 billion.
The potential alliance would unite Estee Lauder's business with Puig's portfolio, which includes brands such as Jean Paul Gaultier, Dries Van Noten, Rabanne, and Charlotte Tilbury. The report said the two companies are nearing terms, though the precise structure and financial details of any deal were not disclosed in those accounts.
Sources told the Financial Times that an announcement could arrive as early as Monday, but they also cautioned that negotiations remain unfinished and the proposed transaction could still fail to materialize. Puig itself addressed the reports in a regulatory filing, confirming that talks are underway while emphasizing that no final decision has been taken and no agreement has been signed between the parties.
The combination, if completed, would bring together two established names in the beauty sector under a single corporate umbrella, creating a company valued at more than $40 billion according to the report. Beyond the brands directly named, the report did not detail other commercial, operational, or governance implications for either company.
Market reaction was immediate: Estee Lauder's stock price declined by more than 4% following the Financial Times coverage. The regulatory filing from Puig reiterated the tentative nature of the discussions and the absence of a binding agreement at this time.
Summary and next steps
The situation remains fluid. Public reports suggest advanced negotiations, markets have reacted with a share-price drop for Estee Lauder, and Puig has filed notice that talks are ongoing but no decision or agreement has been reached.
What is not known - The precise terms of any potential combination, including deal structure, ownership split, governance arrangements, and operational integration, were not disclosed in the reporting cited. The Financial Times account also indicated the possibility that the talks could break down.