Estée Lauder (EL) Stock Falls 8% as Puig Merger Talks Rattle Investors
TLDR
Estée Lauder confirmed it is in talks to merge with Spanish beauty company Puig Brands
EL stock fell 7.7% on Monday after the Wall Street Journal broke the news
A deal would involve a mix of cash and stock, combining two companies worth around $40 billion
Puig stock jumped 15% on Tuesday after the merger talks were confirmed
Analysts at Jefferies warned the deal adds complexity to Estée Lauder’s ongoing turnaround
Estée Lauder confirmed late Monday that it is “in discussions” with Barcelona-based Puig Brands about a possible merger. The news sent EL stock down 7.7% on Monday — a day when the broader market was rallying.
Estée Lauder shares declined on a report that the company is nearing a deal to combine with Puig Brands, a Spanish beauty firm https://t.co/5YI0hxykr0
— Bloomberg (@business) March 23, 2026
The talks were first reported by the Wall Street Journal, which said the two companies have discussed a deal involving a mix of cash and stock.
Estée Lauder’s market cap stands at just over $30 billion. Puig is valued at around $10 billion. A combined company would create a beauty group worth roughly $40 billion.
The Estée Lauder Companies Inc., EL
No final decision has been made, and no agreement has been reached, the companies said.
In Tuesday premarket trading, EL edged up less than 1% to around $80. That’s a modest bounce after Monday’s sharp selloff.
Why Investors Are Nervous
The market often punishes the larger company in potential deals like this. Investors may worry Estée Lauder is overpaying — especially since Puig stock has fallen 36% since its April 2024 IPO, weighed down by worries about slowing demand for its fragrances.
In February, Puig itself warned that growth in the fragrance market is expected to level off in 2025 after a post-pandemic boom.
Jefferies analysts said the deal would add complexity for Estée Lauder at a time when it is already working through its own turnaround. The company has been operating under new leadership and facing headwinds including tariffs and restructuring charges.
EL stock is already down 24% this year. Investors have been concerned about faltering consumer spending and its effect on the company’s bottom line.
What a Deal Would Look Like
J.P. Morgan analysts said a combined business would give Estée Lauder a larger fragrances portfolio and broader exposure to Europe and Latin America.
Puig owns a strong portfolio of brands including Jean Paul Gaultier, Dries Van Noten, Rabanne, and Carolina Herrera. Estée Lauder’s own stable includes MAC, Smashbox, and Jo Malone.
The analysts also flagged that “potential interest from other industry players could emerge,” suggesting this may not be the only bid on the table.
The merger talks come just days after Puig made a notable governance change. Last week, the company appointed Jose Manuel Albesa as its new CEO. Marc Puig, grandson of the group’s founder and CEO since 2004, moved to the role of executive chairman.
J.P. Morgan noted that it was “surprised that the Puig family will relinquish independence and majority control” of the 112-year-old group given the recent leadership shift and its recent stock market debut.
Puig stock surged around 15% on Tuesday following the confirmation of talks. Year to date, Puig is up nearly 20%.
Estée Lauder said it continues to face headwinds including trade policies and enacted tariffs as it works through its business turnaround.
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Filed under: News - @ March 24, 2026 10:30 am