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Estée Lauder and Puig have confirmed they are in discussions regarding a potential business combination to merge the two beauty groups.
The US cosmetics company and the Spanish fashion and beauty group said no final decision or agreement has been reached between the parties yet.
If a merger is agreed, the deal would create a company valued at more than $40bn (£29.8bn), bringing together brands such as Clinique, Tom Ford Beauty, and Charlotte Tilbury.
It comes as combined sales for the two companies exceeded $20bn (£14.9bn) last year. The potential merger follows a period of increased dealmaking within the global beauty sector.
Shares in Puig rose 14% in Madrid today (24 March), while Estée Lauder shares closed down 7.7% in New York yesterday (23 March).
Estée Lauder, which has seen its share price fall 80% since 2021, recently appointed chief executive Stéphane de La Faverie to lead a turnaround plan.
De La Faverie replaced Fabrizio Freda, who retired last year after 16 years as chief executive of the company.
Barcelona-based Puig launched an initial public offering (IPO) in 2024, though the founding Puig family maintains the majority of voting rights.
The group recently appointed its first leader from outside the family, as chief executive José Manuel Albesa took over from executive chair Marc Puig.
Puig has pursued an acquisition-led growth strategy, completing 11 deals for fragrance and fashion brands between 2011 and 2024.
