Puig shares drop as Estée Lauder walks away

Estée Lauder Companies (ELC) has pulled the plug on the Puig merger. The companies officially confirmed discussions of the merger on March 23, ultimately resulting in the termination of the talks announced on May 21.

Following the announcement that the merger had ceased, Puig’s shares fell about 13% while ELC rose roughly 10% in US premarket trading. Talks of the merger have had a mirror image reflection in the two companies’ stocks.

After the potential of a merger was confirmed, ELC’s dropped by 7% on the New York Stock Exchange. Whereas Puig experienced a 5% boost following allegations that ELC was pursuing a financing package for the deal.

The cessation of the merger comes a month after ELC was rumored to have commissioned investment banking firm JP Morgan to structure the €5 billion (US$ 5.84 billion) financing package to fund its acquisition of Puig.

“We have one of the most powerful portfolios of prestige beauty brands in the world, supported by exceptional equity across categories, geographies, and consumer segments, and we believe we are uniquely positioned to drive sustainable long-term growth globally,” said Stéphane de La Faverie, president and chief executive officer of ELC, in a press release published on Thursday.

“The momentum we are seeing across our business reinforces the strength of the path ahead. Through Beauty Reimagined and the implementation of our ‘One ELC’ operating model, we are building a faster, more agile, consumer-focused organization — one that is accelerating innovation, strengthening execution, scaling winning ideas globally, and investing behind the highest-growth opportunities across our portfolio.”

Tilbury trouble

Earlier this week, reports alleged that a conflict with Charlotte Tilbury was complicating the ELC–Puig merger in what was described as a “last-minute obstacle.” According to Spanish newspaper Expansión, which also broke the news about the alleged financing package, the UK makeup brand was pursuing a renegotiation of the terms of her brand’s buyout.

According to Expansión, should ELC have moved forward with the merger, a change-of-control clause in Puig’s existing deal with Charlotte Tilbury would have given Tilbury — the founder of the eponymous brand — the right to force the sale of her shares. This liability held the risk of creating a multi-hundred-million-dollar potential loss for ELC.

Puig acquired Charlotte Tilbury in 2020, reportedly for US$1.2 billion. It presently owns 78.5% of the brand and has plans to incrementally work its way toward full ownership by 2031. Since Puig acquired a majority stake in Charlotte Tilbury in 2020, the brand has more than tripled its net revenue.

Going their own way

La Faverie expressed gratitude for the conversations had with Puig and reiterated the company’s confidence in its brands and ability to operate successfully as a standalone company.

“We are more optimistic than ever about our ability to unlock significant long-term value through Beauty Reimagined, and we remain focused on accelerating that progress,” he said.

The company has been operating under the broader Beauty Reimagined strategy, which focuses on restoring profitability while modernizing how the business operates. In its Q3 report for FY 2026, ELC reported that the strategy has delivered momentum across all five action plan priorities, and we raised its fiscal 2026 outlook.

ELC’s Profit Recovery and Growth Plan (PRGP) has helped soften the blow of the company’s US$1.13 billion loss reported for fiscal 2025. The Q3 report states that the PRGP was ahead of previous projections, sparking confidence in the company’s expected performance in the coming months.

“We remain relentlessly focused on driving sustainable sales growth, expanding profitability, and delivering a solid double-digit adjusted operating margin over time, all while creating long-term value for stockholders,” ELC concludes.

Puig has not yet released a public statement on the matter.