Estée Lauder May Acquire Spanish Beauty Group Puig, Stock Plunges Nearly 8%

Estée Lauder is in talks to acquire Spanish beauty group Puig Brands, causing the company’s stock to plunge nearly 8% after the news.

On March 23, The Financial Times of the UK cited sources saying that the acquisition of Puig by Estée Lauder could be announced as early as Monday, but both sides stated that negotiations are still ongoing, and there is no guarantee that an agreement will be reached.

Previously, reports indicated that Estée Lauder was close to completing the acquisition of Spanish beauty company Puig Brands, with both companies confirming they are in negotiations. The reports noted that the two companies have discussed a merger using a combination of cash and stock, but other details remain unclear.

Puig is headquartered in Barcelona, with a market value of about $10 billion. The company went public in 2024, but its stock performance has significantly underperformed expectations, partly due to weak demand for fragrances.

Following the announcement, Estée Lauder’s stock fell 7.7%, as investors expressed concerns about whether this company, currently undergoing years of business restructuring, can effectively integrate more brands. Puig’s stock, meanwhile, rose about 3.6%.

Estée Lauder’s Integration Capabilities Under Scrutiny

The news of this acquisition has raised new questions about Estée Lauder’s ability to integrate.

The company is still in the midst of a transformation and restructuring phase, focused on expanding market share and attracting younger consumers with innovative brands.

Since CEO Stephane de la Faverie took office, his efforts to reverse the company’s strategic direction have helped boost the stock price over the past year, but the latest earnings guidance has disappointed investors. During a conference call with analysts, de la Faverie admitted:

There is still more work to do.

Analysts point out that, with Estée Lauder still in the midst of its own transformation, acquiring more than ten brands from Puig will pose a severe test of its integration execution capabilities.

Estée Lauder’s last major acquisition was at the end of 2022, when it bought Tom Ford for approximately $2.8 billion, setting a record for its largest acquisition to date.

A Union of Family Businesses

Estée Lauder currently has a market value of over $30 billion and owns more than twenty beauty brands, including Clinique, M.A.C, Bobbi Brown, La Mer, The Ordinary, and the fragrance brand Le Labo.

If this acquisition is completed, it will further expand its already extensive brand portfolio and strengthen its leadership position in the high-end beauty sector.

Puig is headquartered in Barcelona, with a valuation of about $10 billion. Its brands span fragrances, fashion, cosmetics, and skincare, with notable brands including Carolina Herrera, Charlotte Tilbury, Byredo, and Dr. Barbara Sturm. Both companies are family-controlled enterprises.

Puig completed its initial public offering in 2024, but its stock performance since listing has significantly underperformed expectations, partly due to weak demand in the fragrance category.

Last week, the company announced the appointment of Jose Manuel Albesa as its new CEO, with Marc Puig transitioning to Executive Chairman.

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