US cosmetics giant Estée Lauder is discussing a potential merger with Spanish company Puig, which owns fragrance brands such as Rabanne and Jean Paul Gaultier.

A deal could create a $40bn (£30bn) beauty giant, although Estée Lauder has said that no final decision on a merger has yet been made, according to the Financial Times.

“Unless and until an agreement is signed between the companies, there can be no assurances regarding the deal or its terms,” it said in a statement.

Barcelona-based Puig was founded in 1914, and is still controlled by the Puig family. The group owns brands like fashion label Dries Van Noten and fragrance giant Carolina Herrera.

It sells products in 150 countries and had revenues of more than €5bn (£4.3bn) in 2025.

Estée Lauder is the second largest cosmetics company in the world; however, it was forced to make over 7,000 job cuts last year as sales fell.

The potential merger is the latest in a string of recent, large-scale deals in the beauty world. In May 2025, American model and socialite Hailey Bieber’s skincare brand Rhode was acquired by Elf Beauty in a deal worth up to $1bn (£744.5m).

Gucci-owner Kering also agreed last year to sell its beauty business to L’Oreal for €4bn (£3.4bn).

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