Estée Lauder in talks to purchase Tom Ford for greater than $3 billion

Cosmetics and makeup company is ready for its biggest M&A in history

Estée Lauder is in talks to buy luxury fashion brand Tom Ford, a deal that could exceed $3 billion. The transaction could represent the biggest acquisition in the history of the cosmetics giant, which owns brands such as MAC, Clinique and La Mer.

With a market value of nearly $100 billion, Estée Lauder is vying for Tom Ford with other interested parties, a source told Dow Jones. The target company, which is not listed on a stock exchange, is best known for its menswear, but also sells women’s clothing and accessories. The business of Tom Ford, known as the designer who revolutionized Gucci, is considered “ultra-prestige” and maintains double-digit sales growth, driven by luxury demand in China.

Estée Lauder has relied on M&A as one of its growth strategies, but on more modest ticket transactions than is at stake now. She paid nearly $1 billion to buy Canadian Deciem last year, where she was already a partner, and another billion for Korean Have & Be in 2019. In 2016, she paid $1.45 billion for Too Faced.

Bloomberg reported in June that the fashion brand was for sale.

Source: Value Pipeline