Estée Lauder Companies Inc. (EL) and Spanish beauty giant Puig have officially called off their merger talks, ending a months-long will-they-won't-they saga that began in March. The news sent EL shares soaring more than 11% in after-hours trading Thursday, as investors welcomed the clarity.
The two companies first confirmed in March that they were in discussions about a potential business combination, but they were careful to note that no deal was guaranteed. On Thursday, Estée Lauder said those talks are now dead.
Instead, the company is doubling down on its standalone plan: the Beauty Reimagined strategy, which it says is already delivering results. "We are grateful for the conversations we have had with Puig," said Stéphane de La Faverie, president and CEO of Estée Lauder. "Today, we are reiterating our confidence in the power of our incredible brands, our talented teams, and our strength as a standalone company."
De La Faverie added that the company remains focused on accelerating progress under Beauty Reimagined and its One ELC operating model. "The momentum we are seeing across our business reinforces the strength of the path ahead," he said.
Looking forward, Estée Lauder said it will continue to evaluate its portfolio, including potential acquisitions and divestitures, while pursuing sustainable sales growth, expanded profitability, and a solid double-digit adjusted operating margin over time.
The end of merger talks removes a layer of deal speculation from the story for shareholders watching the turnaround this year. Investors appeared to welcome the clarity, with the stock moving sharply higher in extended trading. EL was up 11.57% at $88.04 during after-hours trading on Thursday.
