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Cosmetics leaders explore $40bn merger
Estée Lauder, the U.S. cosmetics powerhouse, is in early discussions with Barcelona-based Puig to form a combined beauty empire valued at approximately $40 billion, the Financial Times reported on Tuesday. Neither company has finalized terms, and Estée Lauder cautioned that no agreement is guaranteed.
The companies
Estée Lauder, founded in New York in 1946, ranks as the world's second-largest cosmetics group after L'Oréal. Its portfolio spans Clinique, Bobbi Brown, and Tom Ford. Despite its global reach, the company reduced its workforce last year amid declining sales and is now seeking a strategic turnaround.
Puig, established in 1914 and still family-controlled, owns fragrance brands Paco Rabanne and Jean Paul Gaultier, alongside fashion label Dries Van Noten and Carolina Herrera. The group operates in 150 countries and generated over €5 billion in revenue in 2025.
Market reaction and sector trends
Estée Lauder's stock fell nearly 8% at Monday's close following news of the potential merger. The talks reflect a broader consolidation wave in the beauty industry, including e.l.f. Beauty's recent acquisition of Hailey Bieber's skincare line Rhode for up to $1 billion and Kering's €4 billion sale of its beauty division to L'Oréal last year.
Next steps
Both companies declined to comment beyond Estée Lauder's statement, which emphasized that discussions remain preliminary. Analysts note that regulatory approvals and shareholder consent would be required before any deal could proceed.
"Unless and until an agreement is signed between the companies, there can be no assurances regarding the deal or its terms."
Estée Lauder statement
