$PUIG.MC

Puig Shares Plunge as Merger Talks with Estée Lauder Called Off

Puig Brands (PUIG.MC) shares tumbled more than 13% by Friday midday after negotiations for a proposed combination with Estée Lauder fell through.The Spanish fashion and beauty company and New York-listed Estée Lauder announced on Thursday that they failed to reach an agreement to combine their respective businesses.The potential merger, first disclosed March 23, would have created a $40 billion luxury beauty group, Reuters noted. The transaction would have combined Estée Lauder brands like Tom Ford, Clinique and MAC with Puig's own labels, including Carolina Herrera and Charlotte Tilbury.Puig Chief Executive Officer Jose Manuel Albesa said the decision will not affect the company's strategic growth plans or its long-term value creation."Our robust capital structure gives us flexibility to pursue a range of strategic choices aligned with our long-term priorities. We will continue to take a highly selective, value-driven approach to M&A to further complement our portfolio," Albesa added.Meanwhile, Estée Lauder intends to focus on the execution of its Beauty Reimagined ​strategy and prioritize its long-term growth. President and Chief Executive Officer Stéphane de La Faverie said the company will "continue to evaluate and evolve our portfolio to ensure we have the right assets to drive the most compelling growth opportunities, including both potential acquisitions and divestitures."