Estee Lauder (EL) Stock Drops 2% as Merger Talks With Puig Advance

TLDR

• Estee Lauder (EL) and Puig are advancing merger talks, with any deal expected to be mostly stock-based
• A formal announcement could come within weeks, per Bloomberg
• Puig Executive Chairman Marc Puig is expected to join the combined company’s board
• The deal would create a ~$40 billion luxury beauty group
• EL has fallen ~15% since talks were confirmed; Puig has gained 11% over the same period

Estée Lauder and Puig first confirmed merger discussions on March 23, though neither company disclosed terms at the time.

The Estée Lauder Companies Inc., EL

Bloomberg, citing people familiar with the matter, reported on April 1 that the talks have progressed and a deal could be announced within weeks.

The transaction is expected to be structured mostly as a stock deal. Neither Estee Lauder nor Puig immediately responded to requests for comment.

If completed, the combination would bring together brands including Tom Ford, Clinique, Carolina Herrera, and Rabanne under one roof.

The combined entity would be valued at around $40 billion, creating a heavyweight in the luxury beauty space.

Puig’s market value stands at approximately 9.8 billion euros. Estee Lauder’s New York-listed stock is valued at around $27 billion.

Marc Puig, who stepped down as Puig’s chief executive last month, is expected to join the board of the merged company. He is seen as a key figure for integration.

His move from CEO to Executive Chairman was described as part of a strategic shift toward M&A activity.

The talks have not resulted in a final agreement. Bloomberg noted they could still fall apart or be delayed.

Market Reaction

Estee Lauder stock has lost roughly 15% since the merger discussions became public on March 23. Puig, listed on the Madrid stock exchange, has moved in the opposite direction — up around 11% over the same stretch.

The premarket drop on April 2 added to that slide, with EL falling more than 2% following the Bloomberg update.

Turnaround Backdrop

Estee Lauder is currently working through a broader company reset under CEO Stéphane de La Faverie. That includes a push toward online retail channels, including Amazon.

Puig has also made internal changes, repositioning Marc Puig from day-to-day operations toward strategic dealmaking.

A deal would strengthen Estee Lauder’s position in fragrances, an area where Puig has built a strong portfolio. Estee Lauder currently sits second globally in cosmetics, behind L’Oréal.

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