Estée Lauder in Talks to Buy Puig to Create Beauty Giant

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1:46Scarlet Fu:Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Kind of a merger Tuesday, if you will. Estee Lauder Companies is in talk to buy Pooj Brands in a deal that would create a cosmetic giant with about$20 billion in annual sales here. Let's get some more details on this transaction. We're joined by Clara Lizaraga. She is company's reporter for Bloomberg News. She is based in Madrid.

2:29Clara, tell us a little bit about Pooj brands. Who are they and why do you think Estee Lauder is in talks to acquire them? hi paul thank you for having me so um pooch unlike estee lauder gets most of its revenues from fragrances it owns major brands like carolina herrera robin john paul gotti and these are brands that have products that have consistently been amongst the top 10 best-selling fragrances so for estee lauder it would help strengthen their position in this category of fragrances where they currently get about 17 % of their revenues. And as you said, it would create a much larger company with a stronger exposure to Europe and Latin America and help it compete more efficiently against rivals like L 'Oreal, for example.

3:22Scarlet Fu:So Clara, I guess the thing with Estee Lauder is that this is a company in reorganization mode. It's got this plan to focus on niche luxury priced fragrances. Does buying Pooch fit into that very specific strategy? Well, exactly. So these are some of the questions that have been asked today. So whether this is the right time for Estée L 'Odère because they're in the middle of streamlining operations. They were at some point reviewing underperforming brands to see if they could divest from some of them. and focusing on higher and more profitable products. So there are questions about whether a deal with Pugna would, one, be the right fit and also would be the right timing, considering these other complex problems need to be resolved.

4:14The reaction so far, so Estee Lodez shares have been falling yesterday and again today. So it would seem that these concerns are definitely weighing in. And Pusch is a family-owned, I know the CEO, Mark Pusch, a member of the founding family, did give up that role, but he is executive chairman. What role does the family play in this company? So the family owns most of the capital and over 90 % of their voting rights. Okay. This is the third generation of the family. And part of the reasons behind the IPO that happened less than two years ago was that they wanted to plan succession and prevent any tensions that could arise relating to generational change by listing the company and making sure that the, you know, the future generations would be owners of the company.

5:18but not necessarily in operational roles. So in that sense, a deal could go in further in that direction. But it also is surprising to think that the family would relinquish control over this company, which is over 100 years old.

5:36Scarlet Fu:Yeah, there's so many things to have to kind of reconcile here. We talked about how Estee Lauder would want to add to its fragrance line to widen that portfolio. But the thing about Pooj is that it also operates, as you mentioned, Carolina Herrera, Nina Ricci. These are all fashion brands. They present collections during the Paris Fashion Week. Is that something S.A. Lauder wants to get into? Or is that something that S.A. Lauder might, I don't know, divest? Or would that be part of the acquisition? um i i think it would because so in essence the pooch strategy has been to buy brands they they make fashion but they also create this image around the the brand and then thanks to that they sell the fragrances so it sort of goes together and it's hard to separate the fashion from the fragrances i think in that sense it would be complementary to estee lauder i guess the question is Pooj also has a smaller part of the business that's called niche brands so things like Byredo another one called L 'Artisan Parfumur and these are much smaller brands with higher prices that the company's been wanting to scale but they currently account for roughly 10 to 15 percent of revenues according to analysts so that's something that would be interesting to Estee Lauder, but there are questions about really how much can that grow and, well, would they want all of these kinds of fragrances or only certain brands?

7:06Is there any regulatory concern here about this deal getting approved? There's some concerns on the makeup side. So Poo Jones Charlotte Tilbury, which I believe is the third largest makeup brand in the US. And so there could be issues on that front, but on the fragrant grounds front, I think it's not a problem. Stay with us. More from Bloomberg Intelligence coming up after this. For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs.

7:50In Season 3 of The Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of The Visibility Gap, a podcast presented by Cigna Healthcare.

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9:11Scarlet Fu:You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. One of the things that the Bloomberg Intelligence folks are looking at is gaming out a recession scenario that may be a little bit more on the front burner now with what's happening in Iran. And one of those industries that you really have to be on the outlook for should the economy soften is the U.S. auto business. And Steve Mann joins us here, Global Autos and Industrials Research Annals for Bloomberg Intelligence, joining us live here in our Bloomberg Interactive Broker Studio.

9:48So, Steve, I mean, the auto business, I mean, cyclical business, but also one that's undergoing a profound transformation, trying to make this transformation to electric vehicles. Probably not a lot of spare capital lining around the cushion during if the economy were to soften. How do you guys think about it? Well, yeah, the industry did take a lot of write-offs because, you know, the EV sales are not going to be what it expected, especially in the U.S. And we were actually coming into 2026 relatively positive for the Detroit Big Three because Trump eliminated, you know, the penalties on gas guzzlers.

10:29We thought, you know, they're going to, you know, these automakers are going to push out these, you know, pickup trucks, SUVs with high margins. And that's how we came in looking at the industry at the beginning of 2026. But then the war broke out, right? And gas prices are at where they're at. If you talk to the people that actually buy and sell gas, oil, it's like 150 bucks, right, on the ground. So it's having a huge impact. Gasoline prices are up 30%, 40 % where I'm at. So now the talk is, you know, are they going to sell that many? pickup trucks and SUVs. Yeah.

11:09Scarlet Fu:Especially with interest rates rising, that means auto loans also become more expensive for consumers. But people will still need cars and they will still need to upgrade or replace their aging vehicles. Where does that leave the automakers? I mean, do people go to secondhand cars? Do they take another look at hybrids and EVs in this environment? I think it's a combination of both. The third thing that could happen is they keep their cars a little bit longer. You know, that's going to benefit companies like O 'Reilly, AutoZone, that actually sells aftermarket parts. You know, a lot of consumers, especially in this K economy, those who are looking for value in affordable vehicles will hold off, you know, even if interest rates are lower.

11:56You know, they want to make sure, you know, the jobs are stable and before they spend$20 ,000,$30 ,000,$40 ,000. dollars how much is a new car again on average average is 50 000 yeah and i'll tell you my boy joe uh in his used car his car repair shop in manisquan his lot is packed man i mean he's got more business he knows what to do with so that goes to your point yeah people are keeping their cars longer you know if we get higher for longer fuel prices does that revive maybe some demand in in EVs and the hybrids? It might. Look, we actually looked at, figured out, looked at what the worst case scenario is.

12:36We looked at past oil shock all the way back to, you know, the Iranian revolution back in the 70s. And we're coming up with, okay, worst case sales in the US could drop as much as 15%. Now, the pie is shrinking, but even within that pie, the split is changing. Definitely. I think it's no surprise. If oil prices are high, it has happened in the past, people will be more interested in hybrids. And this time around, battery EVs as well.

13:10Scarlet Fu:Stay with us. More from Bloomberg Intelligence coming up after this. For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In Season 3 of The Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of The Visibility Gap, a podcast presented by Cigna Healthcare. Everyone has been there.

13:47Scarlet Fu:Your team's feedback is scattered across emails, chats, and sticky notes. It's a mess. But PDF Spaces and Adobe Acrobat gives you one collaborative workspace to streamline every file and comment. So, if you need six departments to finally agree on a proposal, do that with Acrobat. Need to turn a mountain of feedback into one plan of action? Do that with Acrobat. Want to stop searching for files and finally get everyone on the same page? Do that, do that, do that with Acrobat. Learn more at adobe.com slash do that with Acrobat.

14:52We'll see you next time.

14:54Scarlet Fu:you're listening to the bloomberg intelligence podcast catch us live weekdays at 10 a.m eastern on apple carplay and android auto with the bloomberg business app listen on demand wherever you get your podcasts or watch us live on youtube one of the issues from an m a perspective with the second trump administration is this is going to be a very good time to get m a done the regulation the regulators whether it be the federal trade commission department of justice just maybe be more accommodative. And that was certainly the expectation. And from what I understand, that's turning out to be the truth.

15:29And we want to focus on one particular deal, because it's a deal that I'm very familiar with, having covered the media industry for a while. And that is Nexstar, big TV station owner, buying Tegna, another big TV station owner. Jennifer Reed joins us. She's senior litigation analyst for Bloomberg Intelligence, joining us live here in our studio. So as I understand it, Nexstar, again, Again, a huge owner of TV stations across the country, hundreds of them, closed its purchase of Tegna, which are the old TV stations owned by Gannett Company, the newspaper company. That closed. Yes. From the regulators.

16:02Like the Federal Communication Commission, the Justice Department blessed the deal as people thought they would. That's right. That's this administration. But there's still some suits going on. What's going on with that?

16:12Scarlet Fu:Right. Right. So that expectation that the Department of Justice and Federal Communications Commission would go ahead and allow that deal to go forward, I think, ramped up a group of states to be ready to try to go after this deal. And it's because the states have been saying, many states have been saying, and not just Democratic state attorneys general, but in a bipartisan way, the states have been saying, if this administration lacks antitrust enforcement, if they start allowing a lot of consolidation across many industries, we're going to pick up the slack. because states have the right to enforce federal antitrust laws, and they have the right to go after a merger that they believe is unlawful under the antitrust laws, just as the Department of Justice or Federal Trade Commission do.

16:52Scarlet Fu:So that's what we're seeing here. You have eight states that have said this wasn't right. For different reasons, the FCC approval was improper for certain reasons. The Department of Justice clearance was improper for other reasons, and we're going to go ahead and go to court to try to see what we can do here. I've been doing this media M &A thing for a long time. I've never really seen this before. I'm sure it's been out there. So this is basically the state saying, for whatever reason, the federal government, from our perspective, from our point of view, is not as strong a regulator as it needs to be.

17:27Therefore, we're going to pick up the slack and do it from a state level.

17:29Scarlet Fu:Yes. Have we seen this before? Not a lot. Okay. Normally, the states are sort of aligned with the Department of Justice or any of these agencies that are reviewing a deal. We have one example from several years ago when T-Mobile and Sprint merged. They settled with the Department of Justice. They divested some assets to DISH, and the Department of Justice went ahead and cleared the deal. The FCC cleared the deal, and the states went to court. A group of states, I don't remember exactly how many, I think it might have been around 10, went to court to try to block that deal. And, you know, a lot of people would say, and I'll say in this case, too, for Nextar, that once you have the federal regulators that have approved these deals, it is very difficult for the states to then go into court and convince a judge that the experts that cleared the deal were wrong.

18:10Scarlet Fu:The states lost in the T-Mobile Sprint effort. And, you know, we don't know yet what's going to happen with Nexstar. But they do go in with a tough case to make once the FCC and DOJ have approved, which they have. So are they doing this, these states? And you say it's bipartisan, so it's not just Democratic states that maybe wanted to just go against this administration's regulatory policy. I think in this case, it may simply be Democratic states, the ones that have sued Nextar. We also have states that are continuing litigation against Live Nation that originally the Department of Justice had joined them with, was the lead plaintiff.

18:46Scarlet Fu:The Department of Justice settled with one week of trial. The states, in a bipartisan way, have gone forward to continue that litigation. So we are seeing bipartisan efforts in that area. with the next star tegna i'd have to look at those eight states to see the attorney generals right whether they are democrats or republicans if you're next star you close this deal you you pay tegna the money yes is there any risk to next star that somebody some judge could say you got to unwind this thing i think that risk is low i think actually getting an order saying you must unwind this is low if there's some kind of a liability decision yet this deal was anti-competitive My guess would be the more likely outcome would be some divestitures of stations, which is honestly what I thought would have happened with this deal with the Department of Justice to start if it had followed kind of its longstanding tradition with respect to TV broadcaster deals.

19:39Scarlet Fu:Usually the Department of Justice would ask these companies, including Nexstar, which has divested all sorts of stations doing deals in the past to divest in a local area called a DMA in this case, to divest if they would own more than one of the local affiliates of the big four, which are NBC, CBS, Fox, ABC. And that rule today, having done a million broadcasting M &A deals in my life, seems so antiquated. It was antiquated 20 years ago. But now with all the streaming and I mean, it's like, who cares? Well, that's the argument the defendants will make. And that's what the Federal Communications Commission said, in part, in approving this deal.

20:15Scarlet Fu:But I will say that there was an Eighth Circuit decision about the FCC's, every four years it reviews its rules, about its review of its rules. And that narrow market definition focused on those broadcast stations in the Big Four was challenged. And the Eighth Circuit didn't reject that. They rejected rules changes for different reasons, but not because of that market definition. And the thing is, Paul, I know viewership has changed radically, right? In the last 10, 20 years, you've got all the cord cutters, you have people who've never even heard of a cable subscription, but you still have a set of consumers that get those cable subscriptions or Fios or whatever it is.

20:53Scarlet Fu:They want those local stations. They want sports. They want the local programming they can get. And if you have a discrete set of consumers that could be harmed because prices go up, it can still be an antitrust harm. Stay with us. More from Bloomberg Intelligence coming up after this. For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In Season 3 of The Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support.

21:31Listen to the new season of The Visibility Gap, a podcast presented by Cigna Healthcare.

21:39Scarlet Fu:Everyone has been there. Your team's feedback is scattered across emails, chats, and sticky notes. It's a mess. But PDF Spaces and Adobe Acrobat gives you one collaborative workspace to streamline every file and comment. So, if you need six departments to finally agree on a proposal, do that with Acrobat. Need to turn a mountain of feedback into one plan of action? Do that with Acrobat. Want to stop searching for files and finally get everyone on the same page? Do that, do that, do that with Acrobat. Learn more at adobe.com slash do that with Acrobat.

22:20With Bali from iShares, you get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bali, iShares large cap premium income active ETF. iShares, the market is yours. Visit www.iShares.com to view perspectives for investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing. Risks include principal loss and the use of derivatives, which could increase risks and volatility. Monthly income is not guaranteed. Prepared by BlackRock Investments, LLC.

22:48Scarlet Fu:You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Switch gears. We'll go to healthcare as we like to do. There's always news coming out of the healthcare business. There's always M &A trades, and this is no different. Pfizer, they've been working on a Lyme disease drug here, and they recently had, I think they had a study that didn't really impress too much, but I'll tell you, in this part of the country, Lyme disease is no joke.

23:23Boy, a lot of people get it, and it's bad. Debilitating.

23:26Scarlet Fu:Yeah, and it affects you for life, Even if you get over the worst of it in the first two years. So there's just another area where you're kind of waiting for the great science of the pharmaceutical and biotech industry to come to the rescue. Sam Fazelli joins us, Bloomberg Intelligence Director of Research for Global Industries and a senior pharma analyst for Bloomberg. So, Sam, what's going on with Pfizer? What's going on broadly with this little niche field of Lyme disease? Lyme disease, Paul. So all those farmers and folks who go out into fields have a risk of that. Of course, anyone who goes out into a green space, I've got a bit of a garden.