The Estée Lauder Companies (ELC) has confirmed it is in talks with Puig about a potential merger that would create a US$40 billion (A$57 billion) beauty products giant.
The personal care products company said no final decision had been made and no agreement had been reached on a deal with the Spanish fashion and beauty company.
“Unless and until an agreement is signed between the companies, there can be no assurances regarding the deal or its terms,” Estee Lauder said in a press release.
The statement was issued following reports by the Financial Times, Wall Street Journal and Reuters about the merger discussions.
The merger would involve a mixture of cash and stock, the Wall Street Journal newspaper wrote in this article on Monday, citing people familiar with the talks.
The talks follow a series of deals in the sector, including E.l.f. Beauty purchasing Hailey Bieber's skincare brand Rhode for about $1 billion, Kering agreeing to sell its beauty business to L'Oreal and Coty reviewing its consumer beauty business and potentially selling brands like CoverGirl and Rimmel.
Estee Lauder, which is trying to improve its performance, bought U.S. fashion label Tom Ford for $2.8 billion in 2022.
Effectively controlled by the Lauder family, it is one of the world’s leading manufacturers, marketers and sellers of quality skin care, makeup, fragrance, and hair care products, including brands Estée Lauder, Aramis, Clinique and M·A·C.
Puig markets perfume brands like Rabanne, Carolina Herrera and Jean Paul Gaultier.
Estee Lauder shares (NYSE: EL) closed US$6.63 (7.72%) lower at $79.29 on Monday (Tuesday AEDT), capitalising the company at $28.68 billion (A$40.87 billion).
