Estée Lauder Cos. is nearing a deal to buy Tom Ford for roughly $2.8 billion, building on a longstanding licensing deal and marking the cosmetics giant’s largest-ever acquisition, according to people familiar with the matter, Report informs referring to The Wall Street Journal.
Estée Lauder prevailed in an auction for the high-end fashion label that drew competition from big names in luxury including Kering SA.
The French company was poised to win the auction earlier this month, The Wall Street Journal reported.
Should the talks not hit a last-minute snag, a deal could be announced November 15, one of the people said.
The Journal reported in August that Estée Lauder, which sells brands including Clinique and M.A.C., was talking to Tom Ford about a deal that could have been worth at least $3 billion. Volatility in markets and fears of a softening economy appear to have dented the price tag somewhat.
Tom Ford is best-known for its menswear, though it also sells womenswear and accessories as well as a fast-growing, high-end line of cosmetics and fragrances. Tom Ford’s beauty business is considered a so-called ultra-prestige brand.
Estée Lauder has been especially interested in that business, with which it maintains a licensing deal. It is less-versed in apparel, but the takeover could allow the company to venture into new categories and compete more closely with fashion houses such as LVMH Moët Hennessy Louis Vuitton SE.
Estée Lauder is expected to strike new licensing agreements for Tom Ford’s fashion and eyewear, the person said.