Estée Lauder Companies (ELC) is still open to acquisitions after merger talks with Spanish beauty group Puig ended, with valuation identified as the key issue, reported Reuters.
Speaking at a Deutsche Bank consumer conference in France, ELC chief executive Stéphane de La Faverie said the companies could not agree on financial terms.
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“If we cannot reach the growth and the profitability at the right price point, then that is not an option. And this is why, obviously, this deal didn’t go through, because it was not at the right price,” he was quoted as saying, adding that the company would continue to look at opportunities.
Earlier this year, the two companies announced that merger discussions were taking place while also stating that no agreement had been secured and that there was no certainty a deal would be completed.
Those discussions ended formally late last month.
In the event it had gone through, the deal would have combined two premium beauty businesses into a larger group that would have been better positioned to challenge L’Oréal.
Reuters later reported that the failure of the talks was also linked to leaks, differences between the controlling families behind the two companies, and requests from stakeholders, including make-up entrepreneur Charlotte Tilbury.
Separately, ELC said last month that it intended to cut between 9,000 and 10,000 jobs worldwide as part of its “Beauty Reimagined” strategy, which is aimed at delivering annual cost savings of up to $1.2bn.
The company is also involved in litigation.
Last month, Inditex’s UK retail unit disputed a trademark infringement claim filed by ELC, saying its use of the Jo Malone name on Zara fragrances had previously been approved by the cosmetics company’s legal counsel.
The dispute concerns ELC’s ownership of the Jo Malone trademark, acquired in 1999.
The legal action, first filed in March, lists Jo Malone, her Jo Loves fragrance business and Inditex’s UK subsidiary ITX as defendants.
