The Tamesis
what happened?
After the close on Monday, Puig and The Estée Lauder Companies (ELC) surprised the beauty industry by announcing they were discussing a potential merger. The Spanish conglomerate said in a press release that no final decision had been made and no agreement had been reached. “Unless an agreement is reached, no guarantees can be made about the transaction or terms,” the statement said.
If the merger is successful, the market value of the two cosmetics giants will reach 40 billion US dollars. After the news was announced, ELC shares fell 7.7% on Monday night, while Puig shares rose 11%. In fiscal 2025, the two companies generated sales of $20 billion – ELC’s revenue fell 8% to $14.3 billion, while Puig’s revenue increased 7.8% to 5 billion euros.
Headquartered in New York, ELC owns a portfolio of cosmetics, skincare and fragrance brands, including La Mer, Mac Cosmetics, Bobbi Brown, The Ordinary, Le Labo and Tom Ford’s fashion and beauty divisions. Likewise, Spain-based Puig’s product portfolio includes fashion and beauty, from Dries Van Noten, Jean Paul Gaultier and Rabanne to Charlotte Tilbury, Dr. Barbara Sturm and Byredo.
The wind is changing in both companies’ sails. Last week, Puig appointed Jose Manuel Albesa as CEO to work alongside Marc Puig, who will step down from his current role as chairman and CEO of the company to become executive chairman.
ELC CEO and President Stéphane de La Faverie, who joined in January 2025, has led the turnaround after difficulties in China and the travel retail market took a toll on the beauty group’s sales. For the second quarter of fiscal 2026, which ended December 31, 2025, ELC’s organic net sales increased 4% to $4.16 billion. “We delivered excellent second quarter results, building on our strong performance in the first half of fiscal 2026. In this critical year, [ELC’s transformation plan] Beauty Reimagined energizes our business as we execute the largest operational, leadership and cultural transformation in our history,” he told analysts on an earnings call.
why this is important
A merger between ELC and Puig could create a new beauty conglomerate to rival L’Oréal, Unilever and Shiseido.
Ilya Seglin, managing director of investment bank Cascadia Capital, pointed out that after Kering Group announced the sale of Kering Beauté to L’Oreal Group for 4 billion euros in October 2025, ELC has already occupied a place in the high-end beauty market. “The merger with Puig solves this problem to some extent, especially in the fragrance area. Beyond that, the two companies are probably culturally aligned, given the significant family ownership in both companies,” he said.
