Estée Lauder has confirmed merger talks with Puig, though the companies said no agreement has been reached. A deal would combine two major prestige beauty groups with strong exposure to fragrance, skincare, and makeup.
Fragrance Exposure Comes Into Focus
Reuters said one of the main strategic attractions is Puig’s fragrance-heavy mix, with more than 70% of its revenue coming from perfumes. That would strengthen Estée Lauder’s position in one of prestige beauty’s more resilient categories.
The talks also come as Estée Lauder continues a wider turnaround effort after three consecutive years of annual sales declines and weaker momentum in China. Reuters said some analysts see the possible transaction as a way to rebalance the group’s portfolio, though others warned that a large deal could add complexity and distract from the turnaround already underway.
Market Reaction
Puig shares rose as much as 13% after the talks became public, while Estée Lauder shares fell 8%, according to Reuters. That split reaction suggested investors saw a clearer upside for Puig than for Estée Lauder at this stage.
