Estée Lauder is in talks to merge with Puig amid ongoing turnaround plan

“No final decision has been made, and no agreement has been reached,” Estée Lauder said in a statement.

Shares of the U.S. beauty company were down nearly 8% following the news, which was first reported by the Financial Times. Puig’s stock rose roughly 3%.

Puig owns major beauty brands including Charlotte Tilbury, Jean Paul Gaultier and Rabanne. The companies did not disclose any financial details of the potential deal.

Estée Lauder has been struggling amid ongoing headwinds from tariffs and its restructuring as it enacts its “Beauty Reimagined” turnaround plan to revitalize the business. In its second-quarter earnings report last month, the beauty retailer said it’s expecting a $100 million hit to its full-year profitability due to tariff impacts.

Estée Lauder’s stock has dropped roughly 25% this year.