Estée Lauder and Puig Terminate $40 Billion Merger Talks

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5.23.2026

Quick Facts

Estée Lauder and Puig terminated merger talks that would have created a $40 billion beauty enterprise
Charlotte Tilbury’s contractual arrangements with Puig complicated the deal, potentially forcing hundreds of millions in payouts
Estée Lauder shares rose 11% in premarket trading while Puig shares fell 14% after the announcement

Estée Lauder and Spanish beauty conglomerate Puig called off merger talks late Thursday that would have combined brands including MAC, Clinique, Charlotte Tilbury and Jean Paul Gaultier under one company.

The two companies terminated discussions regarding a potential business combination that analysts estimated would have created an enterprise valued at more than $40 billion. The companies first announced they were exploring a merger in March.

Charlotte Tilbury’s contractual arrangements with Puig proved to be a major obstacle. The makeup brand founder hired Rothschild as an adviser and began renegotiating her contract with Puig, which includes performance-based incentives and a change-of-control clause.

The clause could allow Tilbury to trigger the sale of her remaining stake if Puig undergoes a merger or ownership change. Spanish media reported this would force Puig to pay several hundred million euros that Estée Lauder was unwilling to assume.

Puig acquired an additional 5.4% of Tilbury’s business for 215 million euros earlier this year, valuing the business at 4 billion euros. At that valuation, Tilbury would receive 850 million euros if she triggered a full sale.

Markets reacted sharply to the news. Estée Lauder shares rose roughly 11% in premarket trading, putting the stock on track for its strongest single-day performance in nearly a year. Puig shares fell 14%, marking its worst session since its 2024 listing.

“We are more optimistic than ever about our ability to unlock significant long-term value through Beauty Reimagined, and we remain focused on accelerating that progress,” Estée Lauder CEO Stéphane de La Faverie said in a statement.

The merger had drawn skepticism from Estée Lauder shareholders. The company’s market value dropped roughly 20% after news of the talks became public earlier this year. Analysts worried the deal would interrupt Estée Lauder’s restructuring efforts under its Beauty Reimagined strategy.

Estée Lauder reported net sales fell 8% year-over-year to $14.3 billion in its most recent fiscal year. The company is cutting as many as 7,000 jobs by fiscal 2026, more than 11% of its workforce, as part of a restructuring plan expected to generate $0.8-1.0 billion in annual gross benefits.

Puig reported net revenue growth of nearly 5% last year, topping 5 billion euros. The Spanish company went public in 2024 and owns brands including Rabanne, Jean Paul Gaultier, Nina Ricci and Dries Van Noten.

Jefferies analysts described the termination as positive for Estée Lauder, arguing the company regained greater flexibility around future mergers and acquisitions. “A merger with the Madrid-listed group wouldn’t have meaningfully diversified Estee Lauder’s business,” the analysts wrote.