Estee Lauder to buy Tom Ford in a deal valued at $2.8B

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Luxury cosmetics company Estée Lauder is acquiring designer fashion house Tom Ford in a $2.8 billion deal, the company has announced.

The deal would be Estée Lauder’s largest acquisition to date.

As part of the deal announced Tuesday, Ermenegildo Zegna Group and Marcolin SpA will enter into long-term licensing agreements for Tom Ford fashion and Tom Ford eyewear, respectively.

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FILE PHOTO: Designer Tom Ford arrives at the In America: An Anthology of Fashion themed Met Gala at the Metropolitan Museum of Art in New York City, New York, US, May 2, 2022. REUTERS/Andrew Kelly (Reuters/Andrew Kelly/Reuters Photos)

While Estée Lauder said the deal values ​​the overall company at $2.8 billion, the New York-based beauty company is expected to pay about $2.3 billion, following a $250 million payment from Italian eyewear manufacturer Marcolin SpA.

The purchase, subject to regulatory approval, is expected to close in the first half of 2023.

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In a joint statement with Estée Lauder, Tom Ford said, “I couldn’t be happier with this acquisition”.

He said the Estée Lauder Companies “have been an extraordinary partner from day one I founded the company, and I’m thrilled to see them become the luxury stewards in this next chapter of the Tom Ford brand.”

Tom Ford himself will remain in his current position as creative director until at least 2023, the companies announced. Domenico De Sole, chairman of Tom Ford International, will remain on as a consultant until then.

Estee Lauder cosmetics store

An Estée Lauder cosmetics counter is on display in Los Angeles, California, USA (Reuters/Lucy Nicholson/Reuters)

Since 2006, the American beauty company has licensed Tom Ford fragrances and cosmetics.

In Estée Lauder’s fiscal year, which ended June 30, the brand’s net sales grew nearly 25% compared to the prior year. The beauty company said it expects the beauty line to generate net sales of $1 billion in the coming years.

Estée Lauder said the acquisition would “unlock new opportunities”.

“This strategic acquisition will open up new opportunities and strengthen our growth plans for Tom Ford Beauty,” said Fabrizio Freda, president and CEO of Estée Lauder in a statement. “It will also further help us propel our momentum in the high-potential luxury beauty category for the long term, while confirming our commitment to be the leading pure player in the global prestige beauty.”

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Estée Lauder said it plans to fund the acquisition through a combination of cash, debt and $300 million in deferred payments to sellers due from July 2025.

The Associate Press contributed to this file.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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