The cosmetics giant Estée Lauder is in talks to acquire the luxury brand Tom Ford, and the amount of the acquisition, as learned from confidential sources by the Wall Street Journal, could exceed three billion dollars. Reportedly, there are other bidders in the game, but Estée Lauder is the most likely buyer. If realized, it will be the largest, or most valuable purchase for Estée Lauder, which will become a more serious player in the world of high fashion and luxury with Tom Ford under its umbrella.
Acquisition Strategy
Designer Tom Ford founded his brand in 2005 and became known for his high-end collections for men and women, as well as lines of fashion accessories and niche perfumes. Estée Lauder already holds the license to sell the Tom Ford Beauty brand (including perfumes), and they recently announced that revenues for that division grew at a double-digit rate in the third quarter. The cosmetics giant acquired the Korean skincare brand Dr Jart in 2019 and became the majority owner of the Canadian beauty company Deciem last year. Although their stock value has fallen by 26 percent this year, Estée Lauder appears to be continuing its acquisition strategy in hopes of increasing its market value, which is currently estimated at 97.59 billion dollars.
