(NEW YORK) — Estée Lauder is acquiring Tom Ford for $2.8 billion, the venerable beauty brand announced Tuesday.
Through the new deal, the beauty conglomerate plans to add the designer label’s fragrances, cosmetics, skin care and apparel to its large portfolio of brands.
While the acquisition is subject to certain conditions, including regulatory approvals, it is expected to close during the first half of next year.
Estée Lauder said it has made arrangements to pay for the transaction through cash, debt and $300 million in deferred payments to the sellers by July 2025.
Acquiring Tom Ford’s line of fragrances was one of the main drivers of the acquisition, ABC News’s Rebecca Jarvis reported on Good Morning America.
Perfumes were a growth category during the pandemic, while Estée Lauder was hit hard by China’s COVID-19 restrictions — with once booming sales in Asia falling — and its shares down about 40% this year.
Estée Lauder hopes Ford’s flourishing business, whose net sales grew nearly 25% in its most recent fiscal year, according to the company, will fuel even more growth.
“We are incredibly proud of the success Tom Ford Beauty has achieved in luxury fragrance and makeup and its dedication to creating desirable, high-quality products for discerning consumers around the world,” Fabrizio Freda, president and chief executive officer for The Estée Lauder Companies, said in a statement. “As an owned brand, this strategic acquisition will unlock new opportunities and fortify our growth plans for Tom Ford Beauty. 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.”
Tom Ford Beauty was initially launched as a partnership with Estée Lauder in 2006 with fragrance, makeup and skin care, and through the years, has grown to be a highly sought-after brand.
“I could not be happier with this acquisition as The Estée Lauder Companies is the ideal home for the brand. They have been an extraordinary partner from the first day of my creation of the company and I am thrilled to see them become the luxury stewards in this next chapter of the Tom Ford brand,” Ford said in a statement.
While Ford himself has not confirmed his future plans, he will continue to stay with the brand through the end of 2023.
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