The head of cosmetics giant Estee Lauder revealed Tuesday that a potential merger with Puig, the company behind Jean Paul Gaultier, fell apart over pricing concerns, though the beauty manufacturer remains interested in future acquisition opportunities.
Stephane de La Faverie, President and CEO of the U.S. cosmetics maker, explained that negotiations with Puig concluded last month without a deal that would have formed a major beauty conglomerate capable of challenging industry frontrunner L’Oreal.
According to five sources familiar with the negotiations who spoke to Reuters, the discussions broke down due to information leaks, disputes among influential family stakeholders, and various demands, including those from make-up magnate Charlotte Tilbury.
During his remarks at a Deutsche Bank consumer conference in Paris, de La Faverie attributed the failure to financial terms.
“If we cannot reach the growth and the profitability at the right price point, then that is not an option. And this is why, obviously, this deal didn’t go through, because it was not at the right price,” he explained, noting that his company would keep evaluating potential deals.
The parent company of Clinique and M.A.C announced in May plans to eliminate between 9,000 and 10,000 positions worldwide as part of its “Beauty Reimagined” restructuring initiative, targeting up to $1.2 billion in yearly cost reductions.
