Estée Lauder is in talks about a potential business combination with Spanish beauty group Puig.
In a statement, the US-based skin care, makeup and fragrance company confirmed that it is in “discussions regarding a potential business combination with Puig, in which the two companies would potentially merge their businesses”.
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The group warned: “No final decision has been made, and no agreement has been reached. Unless and until an agreement is signed between the companies, there can be no assurances regarding the deal or its terms.”
Financial terms of the potential deal were not disclosed.
The Wall Street Journal reported that Estée Lauder and Puig have discussed a combination structured with a combination of cash and shares.
If the deal goes through, it will place a large collection of beauty and fragrance names in the same group, including Tom Ford, Carolina Herrera, Rabanne, and Clinique.
Citing a source familiar with the matter, Reuters reported that one driver of a tie-up would be to create a larger player better positioned to compete with L’Oréal.
The news agency said such a deal would result in a luxury beauty group valued at $40bn and strengthen the parties’ footprint in global fragrances, a category that is starting to soften after several years of strong post-pandemic momentum.
With a market capitalisation of $31bn, Estée Lauder owns brands that include Bobbi Brown and La Mer, as well as fragrance labels such as Le Labo, Jo Malone and Kilian Paris.
Puig is behind perfume lines associated with Jean Paul Gaultier and Byredo, and owns cosmetics brand Charlotte Tilbury.
The discussions come as Estée Lauder works on a turnaround while contending with weaker consumer spending in the US.
Puig, for its part, reported a slowdown in fragrance growth last month as sales patterns returned closer to pre-pandemic levels.
Fragrance is Estée Lauder’s third-largest revenue segment and has been expanding in part due to demand from Gen Z consumers.
In the company’s latest quarterly update, the fragrance division recorded a 9% increase while overall net sales rose 6%.
Estée Lauder has a track record of acquisitions, including its $2.8bn purchase of US fashion label Tom Ford in 2022, its largest deal to date.
The company has also identified fragrance as a key element in its turnaround plan. For Puig, fragrances account for more than 70% of revenue.
The group completed Spain’s biggest IPO in almost a decade in 2024 and reported a 12% increase in 2025 net profit last month.
