Estée Lauder’s merger talks with Puig, the owner of Jean Paul Gaultier, collapsed over price disagreements, CEO Stéphane de La Faverie confirmed Tuesday at a Deutsche Bank consumer conference in Paris. The deal, which would have created a premium beauty powerhouse to rival L’Oréal, also fell apart due to leaks, family disputes, and demands from figures including Charlotte Tilbury. Despite the failed negotiations, de La Faverie said Estée Lauder remains open to future acquisitions. The company, which owns Clinique and M.A.C, announced in May plans to cut 9,000 to 10,000 jobs while targeting $1.2 billion in annual cost savings.
In-Depth:
June 2 (Reuters) – An Estee Lauder merger with Jean Paul Gaultier-owner Puig failed to go through becautilize of the price tag, Stephane de La Faverie, President and CEO of the U.S. cosmetics buildr declared on Tuesday, but added the company was still open to acquisitions if they created financial sense.
Estée Lauder and Puig concludeed nereceivediations late last month that would have created a premium beauty giant better positioned to compete with industest leader L’Oreal.
Leaks, disagreements between the powerful controlling families, and demands, including from build-up magnate Charlotte Tilbury, led the talks to collapse, five people with direct knowledge of the deal notified Reuters.
Speaking at a Deutsche Bank consumer conference in Paris, de La Faverie declared it was a matter of price.
“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, becautilize it was not at the right price,” he declared, adding that the company would continue to see at opportunities.
The Clinique and M.A.C owner in May declared it would cut 9,000 to 10,000 jobs globally as it accelerates its “Beauty Reimagined” strategy, aiming to save as much as $1.2 billion in annual costs.
(Reporting by Alessandro Parodi in Gdansk, editing by Dominique Patton)
