Estée lauder eyes €40 billion bid from puig in beauty mega-deal

US cosmetics giant Estée Lauder is in advanced talks to merge with Spanish beauty group Puig, creating a potential €40 billion fashion and beauty conglomerate. The proposed deal would combine Estée Lauder's skincare, makeup, and fragrance powerhouses – including brands like Clinique and Tom Ford Beauty – with Puig's portfolio of designer labels like Jean Paul Gaultier and Carolina Herrera.

Puig and estée lauder in merger discussions

Both companies confirmed the discussions but offered little detail on structure. While a deal isn't assured, the potential combination has already sent Puig's shares soaring 14% on Tuesday. The move comes as both companies navigate headwinds, including slowing consumer spending and inflationary pressures.

Analysts at Citigroup caution that the merger presents complexity and execution risk, especially given Estée Lauder’s ongoing Business turnaround. The company's stock is down 80% from its 2021 peak. However, the scale offered by Puig could be a vital lifeline.

The collaboration would leverage Puig's strong position in fragrances and Estée Lauder’s dominance in skincare.