Tis’ The Season Of M&A: Tom Ford Could Get Picked Up By Estée Lauder

Photo by michela ampolo on Unsplash

Speculations have come true.

Didn’t we tell you last month that luxury brand, Tom Ford, is working with investment bank, Goldman Sachs to explore a potential sale worth several billion dollars?

Lo and behold! 

In what could be its biggest ever acquisition, New-York based beauty giant Estee Lauder is in talks to buy Tom Ford – for $3 billion!

For this context, Estée Lauder primarily sells skin-care products, cosmetics, and perfume. Its brands include MAC, Clinique, La Mer, and Aveda. With a market value of nearly $100 billion, it has the wherewithal to do such a deal.

Ok, but… what’s in it for the cosmetic brand?

For one, Estee Lauder knows Tom Ford really well because Lauder has been working with Ford on its fragrances for years now.

And because Lauder knows Ford’s culture so well, it might just turn out to be valuable and reduce the risk of acquisition failure. 

Brownie points to Lauder for being able to see opportunities in the business that aren’t immediately apparent to others. If that’s true, the opportunity translates to an advantage in the acquisition process!

For all we know, there could be other suitors too for Tom Ford because Lauder isn’t the only one betting on the stakes.

Tom Ford’s beauty business is considered a so-called ultra-prestige brand, meaning it resonates with the most discerning consumers. Ford was among a handful of brands with double-digit sales growth possessing a strong demand for its luxurious offerings in China.

As for Estée Lauder, the company has been on an acquisition spree over the years, though the pocketed deal sizes have been small.

Two years ago, it paid $1 billion each to buy the Korean skin-care company Have & Be Co. and the rest of the Canadian beauty company Deciem Inc. in 2021. 

Too long? Here’s a one-liner: Estée Lauder is in talks to buy luxury fashion brand Tom Ford in a potential $3 billion or more deal, its largest-ever acquisition.

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