Estée Lauder Agrees to Buy Tom Ford Brand in $2.8 Billion Deal
It looks like Sephora will become an entirely new company.
Paris-based Estée Lauder Group Inc. announced Monday that it has entered into an agreement to acquire the beauty beauty beauty brand known as Tom Ford. The deal is valued at just over $2.8 billion and will close at the end of the second quarter of 2013. The companies will have a joint venture in the Tom Ford range of beauty and personal care products.
The deal is being made at the request of Tom Ford, who was looking for a company with the resources to develop his brand of make-up-styled fragrances. The deal will also enable Tom to use its international distribution network to distribute Estée Lauder products all around the world, potentially expanding brand to include countries such as Russia and Australia.
Estée Lauder has also created a new cosmetics company, Estée Lauder Beauty and Personal Care (ELABP), which will be based in Boca Raton, Fla. It will be headed by Estée Lauder’s new president of international beauty brands, Lisa Levin.
When it comes to Estée Lauder, a company that is widely admired across the beauty industry for its high beauty standards, new CEO John Lassiter says this type of acquisition shows the importance of the brand. “It’s a company with global reach and deep resources, and an industry leader, and we know they’re really interested in developing and developing the brand.”
Lassiter says the brand is strong because Estée Lauder has an unwavering belief in quality, a focus on service and has a culture that is built on a deep appreciation for beauty. “This brand has a reputation for doing things right, for supporting small businesses and for always maintaining its standards,” he says. “That’s what we’re trying to do, and that’s what we can do. And this is a great brand to bring to the table.”
The deal should make Estée Lauder much more competitive on the global stage. Last year, Estée Lauder earned about $