When Xavier Brun, a portfolio manager at Madrid-based Trea Asset Management and an institutional investor in Puig, received an email from the Spanish beauty group announcing its first-ever Capital Markets Day (CMD) since going public, he had little reason to expect it would be put on pause after months of preparation. The emergence of merger talks between Puig and Estée Lauder changed that.
After Puig and Estée Lauder confirmed discussions on a potential business combination in late March, Brun sought clarity on whether the April 21 CMD investor event in Madrid—announced last fall to present the company’s strategy and long-term priorities alongside its first-quarter sales—would still proceed.
“I messaged them when the news broke to ask what was happening with the Capital Markets Day, because I was planning to go to Madrid from Barcelona, but they didn’t respond,” Brun, who participated in Puig’s IPO, told BeautyMatter.
Now that the original date has passed, Puig has yet to say when the investor event will take place, as it discusses the landmark tie-up with the American company controlled by the Lauder family and home to brands like Clinique, MAC Cosmetics, and La Mer.
Puig is expected to update the market on its negotiations with Estée Lauder on April 28, when it reports first-quarter 2026 earnings. The company most recently posted annual revenue of €5 billion ($5.85 billion), up 5% year over year. Its potential new partner, if the merger goes through, Estée Lauder, reports fiscal third-quarter earnings on May 1, after most recently posting a 5.6% increase in sales for the three months ended December 31 and full-year sales of $14.33 billion, down 8.2% from the prior year.
The potential deal to better compete against French competitor L'Oréal signals a clear pivot from the strategy Puig had only recently laid out to investors.
Brun met Puig Chief Executive Marc Puig several times at investor meetings and industry conferences in London and Paris, as well as over a couple of business lunches in Madrid, the most recent just before this past Christmas.
At that roundtable, held at a five-star hotel in the Spanish capital and attended by about 20 investors, Marc Puig—then CEO and Chairman and now Executive Chairman following the recent elevation of José Manuel Albesa to the top job—said he planned to focus his involvement in the family-controlled company founded by his grandfather on mergers and acquisitions, with a particular emphasis on smaller beauty companies.
“Marc Puig said there are many small or niche beauty brands approaching Puig as potential acquisition targets, seeking the scale needed to grow,” Brun said, recalling his most recent conversation with the Puig Executive Chairman.
The 64-year-old executive led the group for roughly two decades, overseeing acquisitions such as Charlotte Tilbury and Dr. Barbara Sturm as part of a broader push to diversify beyond fragrance and fashion, which still account for about 72% of annual revenue. Brands including Apivita, Uriage, Loto del Sur, Kama Ayurveda, and Byredo have been added to Puig’s portfolio in recent years to reduce reliance on beauty licenses after losing control of Valentino and Prada against L'Oréal in 2018 and 2019.
Brun sees a potential deal with Estée Lauder as a validation of Puig’s underlying value, one he believes is not reflected in the market. In conversations with Brun, Marc Puig said the company was “frustrated” with its share performance following the May 2024 initial public offering.
“They [Puig] were very clear that they saw the shares as too cheap,” Brun said, noting that at one point they fell to around €14 ($16) per share, well below the €24.50 ($28) IPO price, despite having a portfolio that includes globally recognized labels like Carolina Herrera, Rabanne, and Jean Paul Gaultier, and additional assets such as a 50% stake in Spanish skincare company ISDIN. Since the listing, Puig has seen its valuation decline by roughly 25% to about $11 billion, with shares trading near €18 ($21), down from a peak of nearly €27 per share in June of 2024.
Despite that potential, Brun said the merger talks came as a surprise—particularly given what they could mean for Puig’s identity, with a transaction potentially marking the disappearance of a century-old name.
Still, Brun argued that “Estée Lauder would benefit more from Puig than Puig from Estée Lauder,” pointing to Estée Lauder’s performance over the past four years that has led to the loss of over $100 billion in market cap.
He had expected a different strategic move from Puig, such as the acquisition of Kering Beauté, which L'Oréal ultimately secured in a $4.66 billion deal. Puig lost out by roughly €250 million ($293 million), according to sources familiar with the negotiations—a setback that industry sources say stalled its push to compete more directly with its longtime French rival, which in mid-April flagged a slowdown in the fragrance category.
L'Oréal reported first-quarter sales growth of 3.6% to €12.15 billion ($14.23 billion), largely driven by Europe, where momentum remained strong across all markets. Shares climbed 9% to around €372 on the results, giving the group a market capitalization of roughly €201.2 billion.
During the company’s earnings call on April 22, BNP Paribas analyst Jeff Stent raised the prospect of consolidation in the beauty industry. L’Oréal CEO Nicolas Hieronimus said such developments underscore that “scale and a good portfolio of brands is one of the winning factors,” but “not the only ones.”
“You have to have the innovation firepower. You have to have the agility, because being big is not always compatible with being agile—and that’s what we are very focused on preserving at L’Oréal,” Hieronimus said. “And then there’s a company culture.”
That question of culture is one of the recurring concerns around a potential deal between Puig and Estée Lauder, according to other Puig shareholders, who spoke to BeautyMatter on condition of anonymity.
Should the companies ink a deal, investors expect a complex and potentially lengthy integration, drawing parallels with Puig’s acquisition of Charlotte Tilbury, which required integrating a London-based headquarters. They also point to clear differences in operating models. Puig tends to grant its brands greater autonomy and creative freedom, while Estée Lauder has at times struggled to keep parts of its portfolio fresh under a more centralized approach, managing brands in clusters through shared teams.
The investors also worry about founder dependency. Charlotte Tilbury opted to sell her brand to Puig rather than Estée Lauder during takeover talks, according to sources familiar with the transaction, and investors fear that if she were to step back, the brand—so closely tied to her identity—could weaken.
Estée Lauder has faced similar dynamics before. Bobbi Brown exited her namesake brand in 2016, at 59, after more than two decades with the company. Following the end of a 25-year noncompete, she launched Jones Road Beauty in 2020, saying that working for Estée Lauder “was great until it wasn’t,” and adding that she stayed as long as she did in part because of Leonard Lauder. “When Leonard Lauder was in charge, I could always call him… he would say, ‘We’ll figure this out, we’ve got it,’” she said in her memoir Still Bobbi. She also said that she doesn’t regret selling her namesake brand.
Jones Road has since gained traction, reaching about $160 million in revenue in 2024. By contrast, sales at the Bobbi Brown brand, still owned by the conglomerate since Leonard Lauder drove its acquisition in 1995, have fallen to around $250 million in 2024, according to Barclays and Euromonitor, down from a previous range of $500 million to $1 billion.
Investors also point to differences in product strategy. Estée Lauder often launches major products across multiple brands at roughly the same time, at times creating internal competition, while Puig takes a more deliberate approach—spacing out launches and backing them heavily. That strategy was evident in the rollout of Carolina Herrera’s latest women’s fragrance, “La Bomba,” which was supported with a large-scale global push.
Brun has long believed in Puig's quality and portfolio, taking a stake in the IPO with a long-term view and continuing to add to his position even as the share price declined.
Asked whether he would retain his holding if Puig and Estée Lauder seal a deal after months of negotiations that accelerated in recent weeks, Brun declined to give a definitive answer, though he said he would expect a premium.
“I want to see the terms of the deal first,” he said. “What I expect is for the offer price to reflect Puig’s true value, in other words, that the share-exchange ratio reflects what the company is really worth.”
That cautious stance is echoed by other investors, many of whom say they have long recognized the value of Puig’s brands but have grown frustrated with its governance and communication as minority shareholders. The Puig family controls roughly 72% of the equity and 93% of voting power through Class A shares with five votes each, compared with one vote per share for Class B stock.
“They [investors] believe in Puig, but are not willing to wait and see how the integration with Estée Lauder plays out,” another investor said. “The consensus is that Puig is a great company, but it has handled the market poorly, and if the deal doesn’t go through, there will be concern.”