The stock of Estée Lauder (EL) is up 10% after the cosmetics giant announced that a potential merger with Spanish beauty group Puig (BME: PUIG) has been called off.
In a news release, Estée Lauder said that merger talks that had been ongoing for the past few months have been “terminated.”
Estée Lauder, which owns brands such as Clinique and Tom Ford Beauty, said in March that it was in merger discussions with Puig, the owner of Charlotte Tilbury and Jean Paul Gaultier.
Management at Estée Lauder said that it remains focused on its “Beauty Reimagined” turnaround strategy, which involves focusing on premium brands and streamlining the company.
While Estée Lauder’s stock is up 10% on news of the merger’s termination, Puig’s stock is down 14%.
Estée Lauder entered the merger talks with Puig after it said in February that it expects a $100 million U.S. hit to its full-year profitability due to tariffs.
In addition to the turnaround strategy, Estée Lauder has announced plans to slash 10,000 jobs, which could save the company $1.2 billion U.S.
Analysts and investors had been concerned about the merger with Puig due to a mismatch of products and potential clash of brands.
EL stock has declined 73% over the last five years to trade at $78.91 U.S. per share in New York.
