MADRID, April 7 - The founding families that control Spanish fashion and fragrance group Puig and U.S. cosmetics giant Estée Lauder will meet in New York this week to negotiate terms for a prospective business combination, a person familiar with the discussions said on Tuesday.
The source, who spoke on condition of anonymity because the talks remain confidential, said both sides are seeking to conclude an agreement within the coming weeks. The person also confirmed details reported earlier by the Spanish newspaper Expansion.
Public statements from the two companies have been limited. Puig declined to comment through its spokespeople, while Estée Lauder was not available for comment outside of U.S. business hours.
Last month both companies disclosed they were exploring a transaction that, if completed, would combine a wide set of premium brands under a single roof. Among the brands expected to sit within the combined portfolio are Tom Ford, Carolina Herrera, Rabanne, Jean Paul Gaultier and Clinique. Puig itself owns brands including Rabanne and Nina Ricci.
According to Expansion, the structure being discussed is a cash-and-share public takeover bid by Estée Lauder for Puig, with the newly formed company to be listed on the New York Stock Exchange. That format would affect family control dynamics, the Spanish paper reported, noting the merger approach under discussion would dilute the Lauder family’s level of control to a degree that would bring it closer to the stake potentially held by the Puig family.
The report also indicated that Puig’s non-voting shareholders would be offered either cash or shares with limited voting rights as part of the transaction mechanics.
Analysts cited by the Spanish newspaper estimate the combined group would generate revenue of just over 20 billion euros, positioning it ahead of the 15.6 billion euros reported for L'Oreal’s Luxe division. The L'Oreal figure follows that division’s acquisition last October of beauty assets from Kering, the owner of Gucci.
Operationally, Puig had been scheduled to release first-quarter sales figures and to hold a capital markets day on April 14. The company has postponed the sales report to April 28 and has not yet set a new date for its capital markets presentation.
Analytical note: The immediate focus of the talks, as reported, is on negotiating the terms and governance structure of a proposed transaction. Both families and their advisers are weighing how a cash-and-share takeover bid and the proposed NYSE listing would allocate cash, voting power and share class rights among different shareholder groups.