The Estee Lauder Company is acquiring luxury powerhouse Tom Ford in a deal valued at $2.8 billion, marking the beauty firm’s biggest acquisition yet. The company also beat out French luxury conglomerate Kering, which was also rumored to be in the running to acquire the U.S. fashion label. As part of the deal announced Tuesday, Ermenegildo Zegna Group and Marcolin S.p.A. will enter long-term license agreements for Tom Ford fashion and Tom Ford eyewear, respectively.
However, after receiving a $250 million payment from Italian eyewear producer Marcolin SpA, the New York-based beauty corporation is anticipated to pay around $2.3 billion for the entire business, despite Estée Lauder’s claim that the deal values the entire company at $2.8 billion. The transaction is anticipated to close in the first half of 2023, pending regulatory approvals.
Estée Lauder will acquire Tom Ford in a deal valued at roughly $2.8 billion, building on a longstanding licensing agreement and marking the cosmetics giant’s largest-ever acquisition https://t.co/iMKbUJVRne
— The Wall Street Journal (@WSJ) November 15, 2022
According to the deal, Tom Ford, the company’s founder and CEO will continue to serve as the brand’s creative visionary through the end of 2023. The chairman of Tom Ford International, Domenico De Sole, will continue in his role as a consultant up until that point.
In 2006, Estée Lauder debuted its Tom Ford Beauty Collection. Net sales for Estée Lauder increased by about 25% during the fiscal year that concluded on June 30. The cosmetics company predicted that in a few years, the beauty line would generate net sales of $1 billion.
“This strategic acquisition will unlock new opportunities and fortify our growth plans for Tom Ford Beauty,” said Fabrizio Freda, president and CEO of Estée Lauder, in a statement. “It will also further help to propel our momentum in the promising category of luxury beauty for the long term while reaffirming our commitment to being the leading pure player in global prestige beauty.”
