Estee Lauder and Spanish perfume maker Puig have ended merger discussions, according to sources familiar with the matter. The talks, which were first reported in April, would have combined two of the world's largest fragrance and cosmetics companies.
Strategic Review
The decision to end negotiations came after a strategic review by both companies, the sources said. Neither company has commented publicly on the matter. The merger would have created a beauty giant with combined annual revenue of over $20 billion.
Estee Lauder, known for brands such as Clinique and MAC, has been facing challenges in the Asian market, particularly in China, where consumer spending has slowed. Puig, which owns brands like Carolina Herrera and Paco Rabanne, has been expanding its portfolio in recent years.
Market Reaction
Shares of Estee Lauder rose slightly in after-hours trading following the news. Analysts had speculated that a merger could help both companies achieve cost savings and better compete with rivals like L'Oreal and Coty.
The end of talks does not preclude future discussions, the sources said. Both companies may continue to explore other strategic options, including acquisitions or partnerships.
- Estee Lauder's market cap is approximately $70 billion.
- Puig is privately held, with estimated annual revenue of $4 billion.
- The beauty industry has seen consolidation in recent years, with major deals including Coty's acquisition of 40% of Kylie Cosmetics.
