Red light to the merger of Puig and Estée Lauder. The Catalan multinational of fragrances, fashion, and cosmetics Puig announced this past Thursday to the Comisión Nacional del Mercado de Valores (CNMV) that negotiations and conversations with the American giant Estée Lauder have broken down.
On the part of the Catalan company, it has admitted that it remains focused "on the execution of its strategy and continuing to drive profitable growth across its portfolio of brands." In a statement, the company certifies that the decision "does not alter Puig's strategic roadmap." They also wanted to make it clear that the only thing that happened is that initially, some initial contacts with Estée Lauder were indeed confirmed, but the operation was never confirmed because "there were no guarantees about the operation or its terms."
According to elDiario.es, José Manuel Albesa, CEO of Puig, explained in a statement that "they have been enriching conversations with Estée Lauder."
This operation hid several unknowns and also many loose ends to resolve: interests of both families, of the minority shareholders, and the different types of shares.
Puig has concluded its statement to the Spanish markets authority alleging the group's economic robustness: "Our solid capital structure grants us flexibility to undertake a wide range of strategic alternatives aligned with our long-term priorities. We will continue to apply a highly selective and value-creation-oriented approach in M&A, to continue complementing our portfolio."
Estée Lauder has launched a message in the same tone: "Today we reiterate our confidence in the power of our incredible brands, our talented teams, and our strength as an independent company. We are more optimistic than ever about our ability to generate significant long-term value through Beauty Reimagined, and we remain focused on accelerating that progress," explained its chief executive.
The first announcement of this possible merger was made known in March. If an agreement had been reached in the negotiations, a firm would have been generated that would have distributed its interests in three equivalent thirds, according to the Bank of America report: 38% of revenues would come from skin care, 34% from fragrances, 25% from makeup, and the remaining 3% from skin care.