The Spanish luxury conglomerate Puig, whose names include Nina Ricci, Carolina Herrera, Rabanne, and Dries van Noten, may merge with Estée Lauder.
Late on Monday, Estée Lauder Cos. announced that it is in discussions about a “potential business combination” with Puig Brands of Spain, confirming previous reports about talks that caused the stock of the American company to drop by almost 8%.
The manufacturer of beauty goods (EL) said in a succinct statement that although no final decision or agreement has been made, the two companies could combine their activities. In a statement to Spain’s stock market regulating body, Puig acknowledged the discussions but added that neither a final decision nor an agreement had been reached.There can be no guarantees about the terms or the arrangement until an agreement is made,” Puig stated.
Tuesday’s premarket U.S. trading saw a little increase in Estée Lauder shares, while Puig’s Spain-listed stock (ES:PUIG) saw a 14% increase.
Puig, a Barcelona-based company, runs high-end brands like Dr. Barbara Sturm for skin care, Charlotte Tilbury for makeup and skin care, and Carolina Herrera for beauty and fashion. In February, the corporation said that its sales in 2025 exceeded 5 billion euros, or roughly $5.8 billion.
With its headquarters located in New York, Estée Lauder recorded fiscal 2025 revenues of $14.3 billion. According to a FactSet survey of experts, the firm is expected to make $15 billion in fiscal 2026. In addition to its own brand, the company also owns popular cosmetic brands including La Mer, Clinique, and MAC.
The value of Estée Lauder’s shares has dropped by 25% this year, while the S&P 500 index SPX has lost roughly 4%. On a 12-month basis, however, the shares have outpaced the stock index, climbing 18% vs the S&P’s 16% increase.
The discussions were covered by The Financial Times earlier on Monday.A group of JPMorgan analysts led by Celine Panutti stated that the combined company would have slightly over $20 billion in revenue, give Estée Lauder a wider range of fragrances, and diversify exposure to Europe and Latin America. Puig would also have the chance to join a more expansive and well-rounded beauty group.
However, considering that Charlotte Tilbury is the third-best brand in the prestige makeup market and Lauder is a key competitor, Panutti and her colleagues raised the possibility of U.S. antitrust issues.”Given the recent market introduction, we are shocked that the Puig family will give up independence and majority control of the 112-year-old group, even if it maintains its economic interest,” stated Panutti and her team. The acquisition is particularly “intriguing,” considering the company’s recent governance changes, which included the appointment of José Manuel Albesa as CEO and Marc Puig as chairman.
The analysts pointed out that Puig shares are selling at just over EUR17, which is 8.5 times earnings before interest taxes, depreciation, and amortization (EBITDA), significantly less than the EUR24 IPO price from last May.Panutti and the team stated, “We would think a deal would have to be at a substantial premium to the current share price, around 15 to 20 times EBITDA, equivalent to at least EUR28 per share, even though valuation of beauty assets is under pressure in the broader space.”
Additionally, they stated that the market may continue to support Puig shares if it perceives possible interest from other competitors.
