Puig collapses in Madrid after halt to merger talks with Estée Lauder
According to rumours, the talks have also become more complicated because Charlotte Tilbury has attempted to renegotiate the terms of the buy-back of her share
(Il Sole 24 Ore Radiocor) Puig has been hit hard on the Madrid Stock Exchange by the abandonment of merger talks with US cosmetics giant Estée Lauder. The Spanish group's stock lost 14%, making it the worst performer in the Stoxx Europe 600 index. In the US after-hours, on the other hand, Estée Lauder was up 11.5%. The two groups announced yesterday evening that they had 'terminated negotiations on a potential combination', which would have created a $40 billion luxury and cosmetics giant. No reasons were given for the halt to the talks. "This decision does not change our strategy. We continue to focus on our strengths in the high-end beauty sector,' assured José Manuel Albesa, the CEO of Puig, calling the discussions with Estée Lauder 'significant'. The ceo, quoted in a statement, praised the 'solidity' of the group, founded in 1914 in Catalonia, 'as an independent company', assuring that Puig will continue to adopt 'a highly selective and value-creating approach in mergers and acquisitions in order to continue to complete our portfolio'. The Spanish group owns the Paco Rabanne and Jean-Paul Gaultier brands and reported an adjusted net profit of almost €600 million in 2025, with sales of more than €5 billion. Estée Lauder, founded in 1946 and owner of brands such as La Mer, Clinique, MAC and Bobbi Brown, posted net sales of $14.3bn in the year to 30 June 2025, down 8%, with a net loss of $1.133bn, mainly due to goodwill impairment and restructuring charges. In February 2025, the US group announced a restructuring plan, with the elimination of 5,800-7,000 jobs by the end of 2026. The plan has led to a recovery. In the nine months to last March, revenues rose by 5% to $11.4 billion, with an operating profit of 819 million (against a loss of 395 million) and a net profit of 298 million. Puig and Lauder had confirmed talks on a possible merger on 23 March, in the wake of press rumours. Both companies are family-controlled. Puig's share price has gradually lost ground since the IPO in May 2024 and Lauder's is about 80% below the highs set in 2021, both due to weakening business and succession problems. According to the 'Financial Times', which quotes people close to the matter, negotiations have stalled over issues such as the division of power between the two families and the number of representatives on the board of directors. According to the Spanish newspaper Expansion, the talks have also become more complicated because Charlotte Tilbury, founder of the premium cosmetics brand that bears her name, has reportedly tried to renegotiate the terms of the buy-back of her stake.
