Estée Lauder ends merger talks with Puig as it continues turnaround

The Estée Lauder Companies and Puig have ended discussions regarding a potential business combination, bringing speculation over a deal that could have created one of the world’s largest beauty groups to a close.

The companies had previously confirmed they were in talks over a possible transaction, with reports suggesting that a combined entity could have been valued at around $40 billion, though neither company confirmed the valuation.

Stéphane de La Faverie, President and Chief Executive Officer of The Estée Lauder Companies, said: "We are grateful for the conversations we have had with Puig.

"We have one of the most powerful portfolios of prestige beauty brands in the world, supported by exceptional equity across categories, geographies and consumer segments, and we believe we are uniquely positioned to drive sustainable long-term growth globally."

The Estée Lauder Companies said it remains focused on executing its “Beauty Reimagined” strategy and implementing its “One ELC” operating model, which it said is designed to create a faster, more agile and consumer-focused organisation.

According to the company, the strategy is intended to accelerate innovation, strengthen execution, scale successful initiatives globally and prioritise investment in higher-growth opportunities across its portfolio.

De La Faverie added: "We remain relentlessly focused on driving sustainable sales growth, expanding profitability, and delivering a solid double-digit adjusted operating margin over time, all while creating long-term value for stockholders."

The announcement comes as The Estée Lauder Companies is reviewing strategic options for several brands, including Too Faced, Smashbox and Dr. Jart+.

Industry publication WWD last week reported that some interested parties have explored acquiring all three brands, while others have focused on either the makeup or skincare assets independently.

The potential divestments follow earlier comments from de La Faverie that the company was reviewing its portfolio as part of broader efforts to improve performance and streamline operations.

Separately, The Estée Lauder Companies recently made a minority investment in 111SKIN, the London-based luxury skincare brand founded by plastic and reconstructive surgeon Dr. Yannis Alexandrides.

It comes after the company raised its fiscal 2026 outlook after reporting a 5% increase in third-quarter revenue earlier this month. However, it also announced additional job cuts as part of its ongoing turnaround and cost-saving programme.

The company now expects total workforce reductions of between 9,000 and 10,000 roles, compared with a previous estimate of up to 7,000. Estimated savings from the restructuring could reach $1.2 billion.

Based on the company’s global workforce of approximately 57,000 employees as of 30 June 2025, the upper end of the planned reductions would represent roughly 17.5% of staff.

More than 70% of the additional cuts are expected to affect department store roles, as the company continues efforts to streamline operations and improve profitability amid geopolitical uncertainty, disruption in the Middle East, and softer demand across key Western markets.