Shares of Puig Brands (BME: PUIG) are up 15% after cosmetics giant Estée Lauder (EL) confirmed that the two companies are engaged in discussions about a possible merger.
Estée Lauder said in a statement that a final decision has not been made on any potential deal with Puig and that talks remain ongoing.
Puig stock jumped 14.6% on news of a potential merger with Estée Lauder.
Combining the bigger U.S.-listed Estée Lauder with the smaller Spanish-based Puig would bring some of the world’s biggest beauty brands under one roof, including Tom Ford and Clinique.
Puig has a market capitalization of $10.2 billion U.S., while Estée Lauder has a $28.7 billion U.S. market cap.
The potential merger with Puig comes as Estée Lauder undertakes a turnaround plan to revitalize its growth. The company has struggled in recent years, including with U.S. tariffs.
Puig has seen its sales grow steadily since it went public in 2024 with a portfolio spanning fragrance, skin care, and makeup under brands such as Charlotte Tilbury and Rabanne.
Wall Street analysts estimate that a merger of the two companies would result in synergies of about 5% of target sales and double-digit earnings per share growth within the first year.
EL stock fell 8% on news of the merger talks with Puig. Over the last 12 months, the company’s share price has risen 18% to trade at $79.29 U.S.
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