Estée Lauder and the perfume maker Puig are in merger talks that would potentially put brands such as MAC, Clinique, Charlotte Tilbury and Jean Paul Gaultier under one roof.
Estée Lauder confirmed the discussions but said that no agreement has been reached with the century-old Spanish company.
The American cosmetics multinational has been attempting to stem a slide in sales, with revenue falling in each of the past three years.
In 2025, they said they would cut as many as 7,000 jobs by the 2026 fiscal year, more than 11% of its workforce. CEO Stéphane de La Faverie said at the time that the company was transforming its operating model to be “leaner, faster and more agile”.
“Estee Lauder has lost its footing in recent years and needs to do something radical to get back on top," said Dan Coatsworth, head of markets at AJ Bell.
"A takeover of Puig is an interesting proposition, but history suggests that bolting two companies together is not a guaranteed recipe for success," he continued.
Puig oversees make-up, skincare and fragrance brands such as Nina Ricci, Jean Paul Gaultier and Dr Barbara Sturm.
The company went public on the Madrid Stock Exchange in early 2024.
A merger between Estée Lauder and Puig would create a company valued at more than $40bn (€34.5bn), Jefferies’ Sydney Wagner wrote, and would give the New York company a stronger position in fragrances, which make up most of Puig’s portfolio.
While fragrances remain a strong category, Wagner said competition from independent brands is intensifying, and L'Oréal has strengthened its position.
Shares of Estée Lauder were down by more than 7.5% at approximately 15.30 CET on the New York Stock Exchange. Puig's share price was up by nearly 13% at the same time in Madrid.
