Episode summary
Estée Lauder and Puig End Merger Talks | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Scarlet Fu, Isabelle Lee · Guests: Deborah Aitken, George Ferguson, Liz Hart
Summary
Estée Lauder and Puig’s merger talks collapsed, and the analyst said the breakup likely reflected valuation gaps, Charlotte Tilbury-related deal complexity, and the broader strategic risks around combining two businesses with different product mixes. She argued Estée Lauder remains focused on its turnaround, including innovation, online growth, cost cuts, and a profit-growth program targeting $1 billion to $1.2 billion in savings starting in fiscal 27.
The discussion then shifted to SpaceX and its IPO filing. The analyst said most of SpaceX’s launches are supporting its own low-Earth-orbit satellite network, not outside customers, and estimated the launch business at roughly $4 billion a year versus about $12 billion if internal transfer pricing were recognized. He also said SpaceX’s competitors remain far behind and that the IPO is really a bet on Elon Musk’s long-term vision for space-based data centers and communications, even if Starship slips past 2027.
A final segment on commercial real estate painted a selective recovery. The guest said demand is strongest in Manhattan and San Francisco, where AI companies are driving leasing, while trophy assets are outperforming lower-quality space. She argued higher rates are a headwind, but the bottom in valuations is likely behind the market, with the Southeast also standing out positively.
Key takeaways
- The analyst said Estée Lauder’s breakup with Puig leaves it focused on Beauty Reimagined, cost savings, and a turnaround that could deliver $1 billion to $1.2 billion of savings from fiscal 27.
- She said the failed deal may have hinged on valuation, Charlotte Tilbury complications, and whether Puig would slow Estée Lauder’s growth and profit recovery.
- The SpaceX analyst said about 74% to 75% of launches are tied to SpaceX’s own satellite constellation, making the launch business smaller than it first appears.
- He estimated SpaceX’s launch business at about $4 billion a year, or about $12 billion if internal revenue were recognized for its own LEO missions.
- The real estate guest said AI-driven demand is strongest in Manhattan and San Francisco, and that trophy office space is leading the recovery.
- She said the bottom in commercial real estate valuations is likely behind the market, even though rates remain higher for longer.
Notable quotes
“we think it'd be a 12 billion uh business. And there's a lot of technology in that business, interesting business to us”
“you're you're really buying uh into a big um glorious vision of the future of data centers and communications on the earth”
How the episode opens
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Listen on demand wherever you get your podcasts or watch us live on YouTube. All right, let's go to one of the deals stories that um had been, you know, really supporting this idea that deal making is back with a vengeance. Uh Estee Lauder and Puj uh it's a Spanish cosmetics uh company, luxury brands company really um in talks to merge.
Those merger talks seem to have fallen apart. Deb Akin is our luxury goods analyst joining us right now from London. Deb, what can you tell us about why the these discussions collapsed?
Hi. Um we the rumors in the market the comments in the market are around uh the uh brand which is 78 79% owned by pooh Charlotte Tilbury um and that there is you know there's a put call option option in place till 2031 uh with a view that perhaps more was expected in terms of valuation from the original owner but really uh we don't know that it is that and there was a lot riding on this deal coming together really given that Estauder was amid a big uh strategic overhaul under its CEO uh Stefan Dela Fevy so you know that there are a lot of things going on also the the added risks in the market too with what's happening in Iran uh the knock-on impact onto travel retail which has been with us since the middle of March uh so so many different things really
Where does Estee Lauder go from here on out then because they're left to focus on reviving their company and they've reported three years of annual sales drop.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- luxury beauty mergers
- estée lauder strategy
- space economy and launches
- spacex ipo
- commercial real estate leasing
Companies and tickers mentioned
- EL
- NMRK
- Estée Lauder
- Puig
- SpaceX
- Newmark
Watch the episode
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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