What happened?
Puig and the Estée Lauder Companies (ELC) surprised the beauty industry after the market closed on Monday announcing they are in discussion regarding a potential merger. In a release, the Spanish conglomerate said that no final decision has been made and no agreement has been reached. “Unless and until an agreement is reached, there can be no assurances regarding the deal or the terms,” the statement said.
If the merger is successful, the two cosmetic giants will be worth $40 billion. Following the announcement, ELC’s shares fell 7.7% on Monday evening, meanwhile Puig’s shares rose by 11%. The two companies generated sales of $20 billion between them in fiscal 2025 – ELC’s revenue dropped 8% to $14.3 billion, while Puig revenues rose 7.8% to €5 billion.
ELC, which is based in New York, is home to a stable of makeup, skincare and fragrance brands including La Mer, Mac Cosmetics, Bobbi Brown, The Ordinary, Le Labo and Tom Ford’s fashion and beauty arm, amongst others. Similarly, Spain-based Puig’s portfolio includes fashion and beauty, ranging from Dries Van Noten, Jean Paul Gaultier, Rabanne to Charlotte Tilbury, Dr. Barbara Sturm and Byredo.
The sails have been changing at both companies. Last week, Puig named Jose Manuel Albesa as chief executive officer, working alongside Marc Puig, who is stepping away from his current role of chairman and CEO of the company and into the position of executive chairman.
At ELC, CEO and president Stéphane de La Faverie joined in January 2025 to lead turnaround efforts after difficulties in China and the travel retail market took a toll on sales for the beauty conglomerate. In the second quarter of fiscal 2026, ended December 31, 2025, ELC’s organic net sales rose 4% to $4.16 billion. “We delivered excellent second-quarter results to solidify a strong first half of fiscal 2026. In this pivotal year, [ELC’s transformation plan] Beauty Reimagined has invigorated our business, as we execute the biggest operational, leadership, and cultural transformation in our history,” he told analysts during the earnings call.
Why it matters
The merging of ELC and Puig could potentially be the start of a new powerhouse beauty group, one to rival L’Oréal Group, Unilever and Shiseido.
Ilya Seglin, managing director of investment bank Cascadia Capital, points out that ELC had ground to make up in the prestige beauty market after Kering announced it was selling Kering Beauté to L’Oreal Group for €4 billion in October 2025. “Combination with Puig addresses that somewhat, especially in the fragrance category. Beyond that, these two companies are probably culturally aligned, given significant family ownership at both,” he says.
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