Puig and Estée Lauder had been in talks since March to combine into a leading premium skincare and fragrance business. The proposed merger would have created a scale capable of challenging L’Oréal. By Thursday evening, both sides ended discussions and walked away. The collapse was linked to a change-of-control clause tied to Charlotte Tilbury’s minority stake in her namesake business. Puig acquired a majority stake in Charlotte Tilbury Beauty in 2020 while preserving Tilbury’s minority shareholding and embedding a clause allowing her to crystallise that stake if Puig changed ownership. A Jefferies estimate put the buyout cost at around €900m, which Estée Lauder was unwilling to absorb, making the deal financially unattractive.
"Charlotte Tilbury has effectively torpedoed a $40bn (£30bn) merger between Spanish luxury group Puig and New York-listed Estée Lauder, after a row over the size of the payout she would have been entitled to demand once the deal completed."
"The two beauty conglomerates had been in discussions since March about combining to create what would have been the world's largest premium skincare and fragrance business, capable of taking on the dominant L'Oréal. By Thursday evening, both sides had walked away."
"When Puig acquired a majority stake in Charlotte Tilbury Beauty in 2020 for a reported $1.2bn, the deal preserved a minority shareholding for the founder and her early backers - and, crucially, embedded a change-of-control clause permitting her to crystallise that stake should ownership of Puig itself change hands."
"Analysts at Jefferies have estimated that buying out Ms Tilbury under the clause could have cost Puig in the region of €900m, a sum the Americans were unwilling to absorb into the transaction eco"
#mergers-and-acquisitions #beauty-industry #change-of-control-clauses #corporate-finance #puig-and-estee-lauder
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