Estée Lauder Companies Inc. (NYSE:EL) and Puig have ended discussions about a potential business combination, closing the door on talks first confirmed in March.
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Discussions Terminated
The two companies announced in March that they were in discussions regarding a possible transaction, but cautioned at the time that no agreement had been signed and there could be no assurance a deal would be reached or what the terms might be.
Estée Lauder said Thursday that the parties have terminated those discussions. The company said it remains focused on executing its Beauty Reimagined strategy, which it said is underway and delivering positive 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,” the CEO added.
De La Faverie also said 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 Ahead
The company 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 the talks leaves Estée Lauder pursuing its turnaround as an independent company after the beauty products maker had previously acknowledged the possibility of a tie-up with Puig.
Investors appeared to welcome the clarity, with the stock moving sharply higher in extended trading following the announcement.
The move also removed deal speculation from the near-term story for shareholders watching the turnaround this year.
EL Price Action: Estee Lauder stock was up 11.57% at $88.04 during after-hours trading on Thursday, according to Benzinga Pro.
Photo: Shutterstock
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