Estée Lauder Companies Inc and Puig terminated talks about a potential merger because they were unable to agree on an acceptable price, Stephane de La Faverie, the cosmetics maker's President and CEO, said while speaking at a Deutsche Bank consumer conference in Paris on Tuesday.
The discussions, which concluded in late May, had explored creating a combined premium beauty company intended to strengthen the partners' position against major rivals. According to de La Faverie, the parties could not reconcile expectations for growth and profitability with valuation demands.
"If we cannot reach the growth and the profitability at the right price point, then that is not an option. And this is why, obviously, this deal didn’t go through, because it was not at the right price," de La Faverie said.
After the breakdown of talks, the CEO reiterated that Estée Lauder remains receptive to acquisition opportunities, provided they satisfy the company’s financial criteria for value and returns.
Puig, which holds brands including Jean Paul Gaultier, was identified as the counterparty in the discussions. Media reports cited leaks, disputes between the controlling families and demands from stakeholders - including comments relating to cosmetics entrepreneur Charlotte Tilbury - as contributing factors in the collapse of the negotiations.
Separately, Estée Lauder previously announced plans in May to reduce its global workforce by 9,000 to 10,000 roles as part of its Beauty Reimagined strategy, a programme targeting approximately $1.2 billion in annual cost savings. The company said those reductions form part of its broader effort to reshape operations and achieve targeted efficiencies.
This outcome leaves both companies operating independently while Estée Lauder continues to pursue disciplined, financially-driven acquisition prospects and execute on its cost-savings agenda.