Estée Lauder and Puig are centennial companies with almost two centuries of history. Estée, raised in the New York neighborhood of Queens, began experimenting in her home kitchen with the help of her uncle, a chemist, until she created her first facial creams. Years later, she married Joseph Lauter (later Lauder, due to a translation issue in his passport) and inherited from him the surname that gives name to one of the most relevant cosmetic conglomerates in the world.
From her came the idea of distributing free samples of beauty products, something that is still done in all perfumeries today. Officially founded in 1946, Estée Lauder is now an empire, with over 57,000 employees worldwide. It is the American rival of L'Oreal, the sector leader, with a market value six times higher, close to 190,000 million euros. A European colossus that ranks among the largest listed companies in Europe.
Puig, on the other hand, is a company with 112 years of history behind it, although it began to be known to the general public (at least the financial public) following its IPO on May 3, 2024, at 24.5 euros per share. The market, like many other debuts in recent years, has not treated it well. Before the announcement of the operation, Puig had lost 36% of its value in the stock market. Yesterday, after the announcement of initial discussions, its shares surged by 13%. Among its major milestones, Puig was the creator of the first lipstick manufactured in Spain, 'Milady', in the 1920s; or the famous Agua Lavanda Puig, a fragrance with tradition 80 years after its creation. In the 1960s, it landed in the US and is behind some of the world's best-selling perfumes such as those of Paco Rabanne (1 Million) or Carolina Herrera.
The aspirations of the Catalan company in recent years have been to grow beyond perfumes, focusing on facial and beauty care. Hence the acquisition of the luxury firm Charlotte Tibury in 2020. They are, in short, two of the most relevant families in the global beauty world that have come together to evaluate their future together and be able to face giants like L'Oreal. "It would be impossible to consider a hostile takeover," comment financial sources consulted considering the weight in the shareholding. Both companies are absolutely controlled by the founding families, the Puigs and the Lauders. Despite being two publicly traded companies, the families wanted to maintain almost total control of the capital. The Puigs hold 93% of the voting rights, while the Lauder family retains 82%.
Puig's market value is equivalent to one-third of Estée Lauder's market capitalization, which lost $30 billion after news of the discussions leaked on Monday's session, when it plummeted by 7.7%. The market assumes, based on its reaction, that it will be an acquisition rather than a merger considering the sizes. Puig's stock surged by 13%, surpassing 3.1 billion euros after the news, although its total valuation is around 9 billion euros.
Financial sources point to initial discussions after years of relationship. "As long as there is no agreement, it cannot be guaranteed that an operation may take place" or the terms on which it occurs, states the statement sent on Monday night by the company to the National Securities Market Commission (CNMV). One of the company's shareholders admits to having many doubts about the success of the discussions and that, in any case, the exchange agreement reached "will not be beneficial for the retail investor" considering that it is difficult to recover the losses Puig has suffered in the stock market since its debut and because everything is more related to a family matter, which will be the main factor in the decision.
Puig closed 2025 with a 6.5% growth in profit, reaching 587 million euros and an EBITDA of over 1,045 million euros, with operating margins of 20.7%, closer to the profile of a luxury brand than to the fashion and retail industry in general. Revenues exceeded 5,042 million euros. On the other hand, Estée Lauder's sales closed its fiscal year 2025 at $14.323 billion (about 12.3 billion euros), marking another year of decline for the company. However, the 4% increase in revenue in the last six months could suggest the first recovery in its figures after three consecutive years of decline. Estée Lauder's operating profit was $1.146 billion (below 990 million euros), 28% less than in 2024. This figure is very similar to Puig's, despite almost tripling its sales figure.
Estée Lauder sees the operation as a "bet" to expand its business to "compensate for slow consumer spending in the US and the slow recovery of the Chinese market," one of the world's largest luxury consumers that continues to face difficulties such as Donald Trump's new tariff policy, the housing crisis in China, or now, the war in Iran that mainly impacts Southeast Asia.
"The US is the main market for both companies," analyzed by Goldman Sachs. It represents 26% of revenues for Estée Lauder and 12% for Puig; followed by China with 25% and 2%, respectively, and the Europe, Middle East, and Africa region accounting for over 55% for the Catalan company and 38% for the American one. Puig would provide Estée Lauder with greater exposure to Latin America, where it has a very limited presence, and for the Spanish group, it represents almost a fifth of its sales.
"The combination of both businesses would result in the second-largest player" in the cosmetic industry behind L'Oreal with a market share of 15% compared to the 16% of the French group. Various investment banks see clear business logic in this operation because they are two companies with very similar and complementary origins from a geographical and product perspective. Puig would bring its deep experience in the high-value fragrance and perfume sector, which accounts for 72% of its sales; while Estée Lauder, much more focused on skincare - a business line where Puig had focused on growth - records half of its sales in well-known brands such as La Mer, Clinique, or The Ordinary, and another 29% comes from makeup brands (like Mac, among others).
Bestinver Securities understands the logic of the operation that would "transform the beauty sector, creating a titan with $20 billion in annual sales to compete with L'Oreal". However, in the event that the operation is not a merger but a purchase of Estée Lauder by Puig, their analyst sees "execution risk" as the operation could be proposed in a more effective share exchange that would "dilute control" of the family in the new company; and they also believe that the debt they have acquired from Saks Global - declared bankrupt and whose creditors are now thirty companies - "adds complexity" to the valuation of both firms when closing a price.
In any case, the sources consulted acknowledge that Puig "has no urgency to seek a partner." It has very low indebtedness, equivalent to 0.7 times the group's EBITDA, and has a net cash position of 664 million euros at the end of 2025.
The operation, according to various analysis firms, is expected to be in shares and cash and could close with a 20% premium, which has already been largely reflected in the share price after the news. Banco Sabadell's analysts propose an agreement that would dilute the Puig family's control to 27% of the resulting company. "The Spanish company would achieve a valuation significantly higher than current levels and would start trading in the US where comparable multiples are higher, providing natural growth to the new company," they state. Solely based on multiples, Estée Lauder trades at 50 times earnings, L'Oreal is around 30 times, compared to Puig's 15 times.