Puig's stock price soars amid a possible merger with Estée Lauder

BarcelonaPuig's shares surged by almost 15% on the stock market after reporting on Monday, at the close of trading. who is having talks with the American Estée Lauder to study a possible business merger. Shares of the majority family-owned company ended the day with a 12.97% gain, reaching €17.59 – the best-performing stock on the Ibex 35 – allowing it to recover some of the losses it has suffered since its initial public offering on May 3, 2014. According to statements made Monday night by the Catalan perfume and cosmetics company to the Spanish National Securities Market Commission (CNMV) and by Estée Lauder to the US regulator, the SEC, no final decision has been made nor has any agreement been reached between the parties. In this regard, the company emphasized that, without a firm agreement, there is no guarantee that the transaction will materialize, nor on what terms. But the markets have already done their calculations regarding a deal that could create a new giant in the sector, with a greater capacity to compete with the current leader, the French company L'Oréal (with brands such as Lancôme, Garnier, and Maybelline), whose main shareholders are the Bettencourt Meyers family and Nestlé, and which has a value of over 10.

Puig, headquartered in Hospitalet de Llobregat and one of Catalonia's largest multinationals, would contribute brands such as Paco Rabanne, Nina Ricci, Jean Paul Gaultier, Byredo, Charlotte Tilbury, and Carolina Herrera to this potential large group. Estée Lauder, for its part, would contribute Clinique, La Mer, Bobbi Brown, and Aveda. Furthermore, it finalized its acquisition of Tom Ford in 2022.

A merger between the two companies would create an industry giant with a market capitalization of over €30 billion. Estée Lauder is almost three times larger than Puig, and, as is typical in these cases, shares of the larger company fell 7.72% on the US stock exchange on Monday, with the decline intensifying yesterday. Conversely, as is customary, shares of the smaller company, in this case Puig, soared.

Estée Lauder is bigger than Puig BrandsEstée Lauder is also family-owned and has a portion of its capital publicly traded. The US group's value is around $30 billion—but it has now fallen below that threshold after recent stock market declines—while the Catalan company's value currently exceeds $10 billion thanks to its recent stock market surge. The American company focuses on skincare (48.59% of sales) and makeup (29.35%), while Puig specializes in fragrances and fashion (72%), so combining the two would create a more balanced portfolio. The skincare segment accounts for 11% of sales and makeup for 17%. By market, Estée Lauder is more balanced, with Europe, the Middle East, and Africa (EMEA) representing 37% of its business; the Americas, 30%; and Asia-Pacific, 31%. For Puig, the EMEA region represents 54% of its business; the Americas, 35%; and Asia-Pacific, 10%. Some analysts say the deal is "financially attractive on paper." In any case, the outlook is more favorable for Puig, which last year posted net revenues of €5.042 billion, a 5.3% increase, and profits of €594 million, an 11.9% increase. Estée Lauder, meanwhile, closed its 2024-2025 fiscal year – ending June 30 – with sales of approximately $15 billion, a 2% decrease, and profits of $970 million, a 36% drop, which they attributed to lower sales. The combination of both businesses into a single entity, with revenues exceeding €17 billion, would allow Estée Lauder to offer a larger fragrance portfolio and diversify its markets into Europe and Latin America, while Puig would have "the greatest opportunity to shape" the market, according to JP Morgan's analysis. Puig, founded by Antoni Puig Castelló 112 years ago, took one of its first leaps in the 1920s with Milady lipstick, the first manufactured in Spain. Another milestone was Agua Lavanda in the 1940s. Over the years, under the second generation, comprised of four siblings, the company expanded internationally, reaching its current position under the third generation, with Marc Puig as president and his cousin Manuel as vice president. In the current phase, major transactions have included the acquisition of the British cosmetics company Charlotte Tilbury and the company's initial public offering (IPO).

On March 17, the board of directors of the Catalan company appointed José Manuel Albesa as CEO, replacing Marc Puig, who resigned but remains executive chairman. Miquel Àngel Serra was also appointed CFO, succeeding Joan Albiol. However, Albiol will retain his role as non-board secretary.

Estée Lauder, for its part, was born in 1946 when Josephine Esther Mentzer married Joseph Lauter, and they both adopted the surname Lauder. Just one year after starting the business with homemade skincare and makeup products, they received their first order. Today, it is a global leader in the sector, with a presence in 150 countries, and one of the largest groups in the industry worldwide.