Estee Lauder blames price for failed Puig merger

US cosmetics company Estee Lauder says it is still interested in acquisitions that "make financial sense” after merger talks with Spain's Puig failed, modaes.com reports. The deal would have created a beauty giant valued at $17 billion.

According to Reuters, Estee Lauder CEO Stephane de La Faverie said last week that the reason the Puig acquisition failed was the high cost. "If we cannot achieve growth and profitability at the right price, then the merger is not an option,” Stephane de La Faverie said at a conference in Paris, stressing: "That is why the transaction was not completed, because it was not valued at the right price.”

According to the cited source, de La Faverie is thus trying to silence rumors that emerged after the merger failure, which blamed the position of the founder of Charlotte Tilbury, a brand owned by Puig. According to the news agency, however, among the reasons for the merger failure are leaks, disagreements between the families that control the companies and various claims, including those of Charlotte Tilbury.

Puig's executive chairman, Marc Puig, declared at the company's general meeting of shareholders, which took place at the end of May, that the company was no longer for sale and reaffirmed the family's willingness to be a long-term shareholder.

• "Beauty Reimagined” - Estee Lauder's turnaround strategy

Estee Lauder announced in May that it is continuing to focus on implementing its "Beauty Reimagined” turnaround strategy, led by CEO Stephane de La Faverie. The plan aims to stabilize sales and regain market share after several years of decline by increasing retail investments, optimizing the store network and closing underperforming ones, as well as through operational efficiency measures.

"We have one of the strongest portfolios of prestigious brands in the world and we believe we are uniquely positioned to support long-term sustainable growth globally,” de La Faverie said.

At the same time, Estee Lauder announced the elimination of 9,000-10,000 jobs worldwide to achieve savings of up to $1.2 billion per year (in costs), as part of its restructuring plan.