Estée Lauder reportedly pursuing €5 billion boost for Puig merger
Key takeaways
- Estée Lauder is reportedly seeking €5 billion (US$ 5.84 billion) financing to support a potential Puig acquisition.
- The proposed deal could create a US$40 billion global beauty powerhouse combining major brands.
- Market reaction is positive, with Puig shares rising amid ongoing merger talks.
Estée Lauder Companies (ELC) is reportedly arranging €5 billion (US$ 5.84 billion) in funding for its potential merger with Spanish beauty group Puig.
The beauty conglomerate is said to have commissioned investment banking firm JP Morgan to structure a financing package to fund its acquisition of Puig, sources told Spanish newspaper, Expansion. Following the alleged report, Puig’s stock soared by over 5% on Tuesday.
According to the sources, ongoing discussions indicate that ELC may move toward a takeover deal, financed by cash and shares.
ELC and Puig previously confirmed that they were in talks about a potential merger that would combine the two giants’ portfolios. The combined group could expand ELC’s fragrance portfolio, leveling out the playing field with L’Oréal and LVMH in the luxury scent category.
The deal is presently rumored to be valued at approximately US$40 billion.
Merger make or break?
Experts have warned that a deal this large could prove challenging for ELC, as the company is already eyeing updated business strategies amid financial blows.
The company’s Profit Recovery and Growth Plan aims to help alleviate the US$1.13 billion loss it reported for fiscal 2025 — a loss that ELC anticipates may escalate through 2026.
However, as part of the growth plan, the business took on a restructuring process it estimated would cost around US$500–700 million, but by last December, ELC had spent US$1.14 billion on job cuts, contract terminations, and outsourced tech.
Prior to announcing the billion-dollar shuffle, ELC reported that fragrance was its only growing division, and the company highlighted the Jo Malone London brand as a key growth lever. It then announced doubling down on its commitment to the British fragrance name by introducing a tech scheme aiming to improve its online conversion rates.
If finalized, the merger would see the uniting of beauty heavy-hitters like Carolina Herrera, Clinique, Jean Paul Gaultier, Charlotte Tilbury, and MAC Cosmetics.
