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Estée Lauder Ends Puig Merger Talks to Focus on Turnaround

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Estée Lauder and Spanish perfumery Puig have officially ended their merger talks, a decision that sent Estée Lauder shares soaring over 10% in extended trading. The proposed deal, first disclosed in March, would have created a massive $40 billion luxury beauty conglomerate combining brands like Clinique and MAC with Charlotte Tilbury and Carolina Herrera. However, investors and analysts welcomed the termination, relieved that the company avoided massive integration risks, balance sheet strain, and management distraction during a critical operational overhaul.

Sources familiar with the matter revealed that complex negotiations were further complicated by demands from makeup mogul Charlotte Tilbury, the founder of the namesake brand majority-owned by Puig. Analysts, including RBC Capital Markets, noted that the timing was highly impractical given the underlying complexities of combining two massive, family-controlled empires. Additionally, Estée Lauder is already in the middle of a major internal restructuring plan under CEO Stephane de La Faverie, aimed at reversing three consecutive years of sales and market share declines.

Moving forward, Estée Lauder will prioritize its internal “Beauty Reimagined” strategy, which includes heavy store investments, aggressive job cuts, and closing underperforming outlets to drive sustainable long-term growth. Despite pulling the plug on this specific mega-merger to prioritize its turnaround, the cosmetics giant emphasized that it will continue to evaluate future strategic acquisitions and divestitures to strengthen its market position against industry leader L’Oréal.

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Pernod Ricard and Brown-Forman Explore Merger Amid Industry Slump

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Global spirits giant Pernod Ricard and American whiskey producer Brown-Forman, best known for Jack Daniel’s, have confirmed they are in discussions over a potential merger. The move would combine the world’s second-largest spirits company with a leading U.S. whiskey maker, as both firms navigate a prolonged slowdown in alcohol sales. While Brown-Forman’s shares rose sharply following the news, Pernod Ricard’s stock declined, reflecting mixed investor sentiment about the deal.

The spirits industry has been facing declining demand due to changing consumer habits, rising health consciousness, and pricing pressures from tariffs. Both companies have already initiated restructuring efforts, including cost-cutting measures and job reductions. Analysts note that a merger could deliver operational efficiencies and cost savings, especially given overlapping markets in the U.S. and Europe, though it may not fully address long-term growth challenges.

The proposed deal is expected to include a significant stock component, allowing founding families to retain influence in the combined entity. While Brown-Forman’s controlling shareholders have historically resisted such moves, current market conditions may make them more open to consolidation. The companies stated they will not provide further updates until negotiations are finalized or discontinued.

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Prada Acquires Versace in Major Luxury Fashion Shake-Up

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Prada has officially acquired Versace in a landmark deal worth $1.38bn (£1.04bn), bringing two iconic Italian luxury labels under one umbrella. The purchase price is significantly lower than the nearly $2bn paid by Versace’s former owner, Capri Holdings, in 2018. With this acquisition, Prada strengthens its portfolio—already home to brands like Miu Miu—as competition intensifies against giants such as LVMH, which owns Louis Vuitton, Dior, and Fendi.

The sale comes after a challenging period for Versace. Its long-time creative chief Donatella Versace stepped down in March, ending a 27-year tenure that began after the death of her brother Gianni. She was succeeded by Dario Vitale, previously a design director at Miu Miu. Under Capri Holdings, the brand moved away from its signature ornate aesthetic toward minimalism while raising prices, a strategy that coincided with slowing sales across Capri’s portfolio, including Michael Kors and Jimmy Choo.

Prada said it received all necessary regulatory approvals to finalize the deal. Capri Holdings noted that proceeds will be used to significantly reduce debt, improving its financial position. Prada CEO Andrea Guerra has expressed confidence in Versace’s long-term potential, saying the brand’s next chapter will require “disciplined execution and patience” as it integrates into the Prada Group.

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