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Estée Lauder and Puig Call Off Merger Negotiations

By  |  May 22, 2026
Estee Lauder

Estée Lauder and Spanish beauty group Puig have abandoned discussions over a possible merger that could have formed one of the largest fashion and cosmetics companies in the world, according to Reuters.

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    The two companies confirmed Thursday that they would not move forward with a deal after negotiations failed to resolve key issues surrounding the structure of the proposed combined business.

    “The parties have terminated discussions regarding a potential business combination,” Estée Lauder said in a statement, per Reuters.

    The negotiations, first reported in March, reportedly broke down amid disagreements over how the merged company would be structured. According to Reuters, one of the most significant sticking points involved compensation demands tied to beauty entrepreneur Charlotte Tilbury’s remaining stake in her namesake cosmetics brand.

    Puig acquired a majority stake in Charlotte Tilbury Beauty in 2020 in a deal reportedly worth $1.2 billion. The Spanish company later extended its agreement with Tilbury, allowing her to retain a minority stake while outlining plans to assume full ownership in 2031.

    According to Reuters, the proposed merger included a change-of-control provision that could have enabled Tilbury to sell her remaining stake. Sources close to the discussions said the potential value and implications of that clause became a major obstacle during negotiations between the two companies.

    While several issues contributed to the collapse of the talks, people familiar with the matter told Reuters that the Tilbury-related dispute was considered the largest barrier to completing the transaction.

    Read more: Estée Lauder in Talks to Buy Puig in Potential $20 Billion Beauty Tie-Up

    Estée Lauder Chief Executive Stéphane de La Faverie sought to reassure investors following the announcement.

    “We are grateful for the conversations we have had with Puig,” he said. “Today, we are reiterating our confidence in the power of our incredible brands, our talented teams and our strength as a standalone company.”

    The merger discussions had drawn skepticism from Estée Lauder shareholders. The company’s market value dropped by roughly 20% after news of the talks became public earlier this year. However, investors appeared relieved by the decision to abandon the negotiations, with Estée Lauder shares rising 11.5% in post-market trading on Thursday, according to Reuters.

    Estée Lauder, founded in 1946, owns brands including Clinique, Bobbi Brown and Tom Ford Beauty. The Lauder family maintains control of the company through a dual-class voting structure that gives it more than 80% of voting power despite holding about 38% of the shares.

    Puig, which debuted on the Madrid stock exchange in 2024 with a valuation of €13.9 billion, has struggled in the public markets. According to Reuters, the company’s shares had fallen nearly 30% since its flotation before rebounding sharply when news of the merger discussions emerged. Shares then dropped by about 15% after the termination of the talks was announced.

    Source: Reuters