Luxury brand Tom Ford reportedly in talks to be acquired by Estée Lauder

Beauty brand Estée Lauder is in talks to acquire luxury brand Tom Ford in a transaction that may be worth US$3 billion, the Wall Street Journal reported. According to WSJ, the move might help Estee bolster its premium offerings at a time when demand for upscale clothing and accessories is strong amid record inflation in the US.

It was also reported that the proposed acquisition would be the owner of the Clinique brand's largest ever, and Estee is not Tom Ford's only potential suitor. Nevertheless, there is no certainty that a settlement will be reached and talks could end without a deal. Estée Lauder has declined to comment on the market rumours and speculation.

Although Tom Ford is a luxury brand best recognised for its menswear, it also sells women's clothing as well as handbags. However, Tom Ford did not begin releasing women's cosmetics and perfumes under the Tom Ford Beauty brand until its partnership with Estée Lauder in 2005.

According to the source, Estée Lauder is particularly interested in Tom Ford's cosmetics line and may attempt to license the brand's clothing lines to other companies. As Estée Lauder has always been known as a beauty and wellness brand, the deal would imply that the beauty brand is not only shifting into the fashion scene but also focusing more on luxury.

Estée Lauder recently said that its two brands, Tom Ford and Jo Malone, each had annual revenue close to US$1 billion. Also renowned for the brands Smashbox and M.A.C., Estée Lauder has a market cap of US$97.59 billion, despite the fact that its shares have lost more than 26% of their value this year, according to Refinitiv stats.

Separately last year, Estée Lauder had also been under the spotlight for launching its product, the Advanced Night Repair Synchronised Multi-Recovery Complex serum, into space.

Done in collaboration with the National Aeronautics and Space Administration (NASA), Estée Lauder is the first beauty brand to participate in NASA’s efforts to enable business opportunities on the International Space Station, according to a press release.

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