Cosmetics giant Estée Lauder is in talks to acquire luxury brand Tom Ford for $3 billion, people familiar with the matter told the Wall Street Journal.
If successful, the deal would be the largest acquisition ever made by the owner of the Clinique brand. It would likely help the company boost its sales as affluent consumers are continuing to splurge on high-end apparel and accessories, while consumers from other demographic segments are cutting back on spending due to rising inflation.
Estée Lauder has long been manufacturing cosmetics and fragrances for Tom Ford. If the company secures the deal, it would likely focus on Tom Ford’s beauty division and potentially license the manufacturing and sale of clothing and accessories to another company.
Tom Ford has so far relied on Ermenegildo Zegna to produce its apparel line. However, Zegna’s exclusive production rights are set to expire after the Fall and Winter 2022 collections. Similarly, the brand’s eyewear products are produced and distributed by Marcolin Sp.
The news comes nearly a month after it was revealed that Tom Ford was in talks with Goldman Sachs to explore a potential sale of its business.
While a deal with Estée Lauder will result in a smoother transition, Tom Ford is also reportedly considering bids from other companies.