Estée Lauder stock surges after the company called off merger talks with Puig

Estée Lauder stock rose as much as 11% in premarket trading following the announcement. Puig stock fell more than 14% in Madrid. That was its steepest decline since the Spanish beauty group listed in 2024.

The companies had confirmed in March that they were exploring a combination. Combined, the two would have had a market value of nearly $39 billion and annual sales of around $20 billion in 2025, according to Bloomberg. Neither company provided a reason for ending the talks in their public statements.

The proposed deal fell apart in part over demands by makeup artist Charlotte Tilbury regarding her compensation in the transaction, according to Bloomberg, citing unnamed sources.

Estée Lauder CEO Stéphane de La Faverie said the company would focus on its standalone strategy. "We are reiterating our confidence in the power of our incredible brands, our talented teams, and our strength as a standalone company," de La Faverie said in a statement. "We are more optimistic than ever about our ability to unlock significant long-term value through Beauty Reimagined, and we remain focused on accelerating that progress."

Analysts had questioned whether the merger made strategic sense. Outside of fragrance and perfume, where the two companies shared common ground, their broader brand portfolios pointed in markedly different directions, CNBC reported.

Estée Lauder has been executing a restructuring that includes cutting between 9,000 and 10,000 jobs globally and shifting toward faster-growing sales channels. The company said it expects tariff-related headwinds to affect fiscal 2026 profitability by approximately $160 million to $180 million, net of planned mitigation actions. For fiscal 2027, Estée Lauder projected organic net sales growth of 3% to 5% and an adjusted operating margin approaching 13%, the company said.