NEW YORK: Estee Lauder Cos and Spain’s Puig Brands SA are advancing in negotiations to combine, people familiar with the matter say, putting the two family-owned companies on track to create one of the world’s largest luxury beauty players.
The respective owners of brands including MAC, Le Labo, Charlotte Tilbury and Byredo are discussing a deal that would consist mostly of stock and could be formally announced within weeks, according to the people, who asked not to be identified because the matter is private.
As part of the deal, Puig executive chairman Marc Puig would sit on the board and is expected to be crucial to the integration of the two companies, the people said.
The presence of a Puig family member in a key role is an important step to paving the way for a transaction and will provide continuity, they added. He was also chief executive officer until last month.
The companies haven’t reached a final agreement and the talks could still fall apart or the timing could change.
A representative for Estee Lauder didn’t have an immediate comment. A spokesperson for Puig declined to comment.
Estee Lauder and Puig confirmed on March 23 that they were in discussions about a potential business combination in which they would merge their businesses, without disclosing any terms.
A tie-up between Estee Lauder, which is still owned by the Lauder family, and Puig would reshape the competitive landscape for luxury beauty products, fashioning a significant challenger to French cosmetics giant L’Oreal SA overnight.
Estee Lauder is currently second to only L’Oreal in the cosmetics category globally, with a potential Puig deal giving the pair a stronger foothold in fragrances in particular. — Bloomberg
