Estée Lauder Cos. is in discussions to acquire Spain-based Puig Brands SA in a potential transaction that would create a beauty group with roughly $20 billion in annual revenue, according to Bloomberg.
The companies have not disclosed financial terms. Puig’s market value stands at about €10 billion, or roughly $11.6 billion, while Estée Lauder ended trading Monday with a market capitalization near $30 billion.
A combination with Puig would expand Estée Lauder’s position in fragrance and fashion-linked beauty, adding brands including Rabanne, Jean Paul Gaultier and Carolina Herrera, according to Bloomberg. The move could strengthen Estée Lauder’s ability to compete with L’Oréal SA, the world’s largest cosmetics company. For Puig, the talks come after weaker growth and a series of earnings-estimate cuts that have pressured the stock since its 2024 initial public offering, per Bloomberg.
Investor reaction was swift. Puig shares surged as much as 17% in Madrid on Tuesday (March 24), their largest intraday gain on record, according to Bloomberg. Estée Lauder shares moved in the opposite direction, falling 7.4% by 9:47 a.m. in New York, per Bloomberg.
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Barclays analysts led by Lauren R. Lieberman expressed skepticism about the strategic fit. “The potential acquisition of Puig would veer Estée Lauder off course,” the analysts said, according to Bloomberg. They argued that the Barcelona-based company does not align well with Estée Lauder’s turnaround strategy, including a focus on niche, luxury-priced fragrances, a category that accounts for only about 15% of Puig’s portfolio, per Bloomberg.
Read more: Estée Lauder To Buy Tom Ford For $2.8 Billion
Estée Lauder shares have gained over the past year as investors responded positively to turnaround efforts under Chief Executive Officer Stephane de la Faverie. Even so, the company’s latest guidance increase did not fully satisfy the market. During a conference call with analysts, de la Faverie said that “there is more work to do,” according to Bloomberg.
Puig has also been in the midst of leadership changes. The company recently named a new chief executive, while Marc Puig, a member of the founding family, stepped aside from the CEO role and remained executive chairman with an emphasis on mergers and acquisitions.
The founding family still retains control of Puig through the third generation of descendants of the company’s founders. According to Bloomberg, the family’s fortune is estimated at about $10.6 billion, with most of that wealth tied to its stake in Puig. That figure has declined from about $12 billion around the time of the IPO.
The Puig family held about a 75% stake in the company at the end of last year, according to the company’s 2025 annual report. Puig shares finished Monday about 37% below their IPO price, and investor concerns have also centered on the company’s fragrance exposure, which makes up more than two-thirds of revenue, according to Bloomberg.
Source: Bloomberg
