Estée Lauder confirmed on Monday that it is in talks to merge with Puig, the Barcelona-based privately held beauty and fashion group whose brands include Jean Paul Gaultier, Rabanne and Charlotte Tilbury. A tie-up between the two groups would create a combined entity valued at approximately $40bn, according to the Financial Times.
The announcement triggered a sharp fall in Estée Lauder's stock, a reaction that typically signals investor scepticism about the price or strategic logic of a prospective deal. Estée Lauder's shares have already lost substantial ground over the past two years as the company grapples with weak demand in China and a broader slowdown in prestige beauty.
Puig, which is controlled by the Puig family and went public on the Madrid stock exchange in 2024, has built a strong position in fragrance, a category that has outperformed the wider beauty market. That portfolio could complement Estée Lauder's skincare and makeup-heavy brand stable, which includes Clinique, MAC and La Mer.
The talks emerge during an active restructuring effort at Estée Lauder. The company, led by executive chair William Lauder and chief executive Stéphane de La Faverie, who took the role earlier this year, has been cutting costs and streamlining its brand portfolio after years of margin pressure.
No terms have been disclosed and both companies cautioned that discussions remain ongoing, with no certainty a transaction will result.
