Estée Lauder and Puig End Merger Talks

Summary

Bloomberg Intelligence Podcast

Episode: Estée Lauder and Puig End Merger Talks
Date: May 22, 2026
Hosts: Paul Sweeney, Scarlet Fu
Key Guests: Deb Aiken (Luxury Goods Analyst), George Ferguson (Senior Aerospace/Airline Analyst), Liz Hart (President of Leasing, Newmark North America)

Episode Overview

This episode provides deep dives into three major topics shaping investment conversations on Wall Street:

• The collapse of high-profile merger talks between Estée Lauder and Puig, and what it means for both companies.
• Insights from the SpaceX IPO filing, including a breakdown of the satellite launch and connectivity business, and the broader economics of the space industry.
• A discussion on the bifurcation in U.S. real estate, with special focus on the impact of AI firms, rising interest rates, and shifting demand in office leasing.

---

Segment 1: Estée Lauder & Puig End Merger Talks

Guest: Deb Aiken, Luxury Goods Analyst (London)
Timestamps: [01:45] – [05:33]

Background and Reasons for Collapse

• Estée Lauder and Spanish luxury brand Puig had been in advanced merger discussions, which have now fallen apart.
• Key issue: Complexities surrounding Puig's partial ownership of Charlotte Tilbury (78-79%) and associated valuation disputes.
• A put-call option on Charlotte Tilbury exists until 2031, complicating the structure and anticipated value.
• External market risks—including Middle East unrest affecting travel retail—added uncertainty.

“There was a lot riding on this deal coming together really given that Estée Lauder was amid a big strategic overhaul under its CEO Stefan Della Fevery...”
— Deb Aiken [02:13]

Strategic Landscape for Estée Lauder

• Estée Lauder needs to revive its business after three consecutive annual sales drops.
• Merger rationale: Estée Lauder has only 19% of its business in fragrance, whereas Puig is strong in fragrance (notably Jean Paul Gaultier, Carolina Herrera, Paco Rabanne).
• Estée Lauder is investing in:
  • Innovation
  • Online channels
  • Cost savings through the Profit Growth Program (PRGP), targeting $1–1.2 billion in savings for FY27, with significant upfront costs.

“They are doing more in innovation, they are doing more in shifting online, they are doing more in cost savings… a huge strategy running at the moment.”
— Deb Aiken [03:19]

Implications of the Deal Fallout

• Market reaction: Puig shares down; Estée Lauder shares up—reversal from two months ago.
• The failure may actually provide Estée Lauder with a clearer runway for internal restructuring.
• Poison pill: Puig’s Charlotte Tilbury ownership (and any contested asset claim) could complicate any future M&A for both companies.

Looking Forward

• Both firms are expected to stay active in seeking M&A opportunities.
• Estée Lauder remains weak in fragrance; Puig may seek global expansion platforms.

“Push could find more of a global platform and Estée Lauder needs for me more in fragrances. I’ve said that for several years...”
— Deb Aiken [04:59]

---

Segment 2: SpaceX IPO Deep Dive

Guest: George Ferguson, Senior Analyst (Aerospace, Defense & Airlines)
Timestamps: [07:52] – [15:25]

SpaceX Launch Business vs. Constellation Network

• ~74–80% of SpaceX launches serve its Starlink low-earth orbit (LEO) constellation.
• Over 9,600 satellites deployed; external launch revenue roughly $4 billion/year.
• If internal launches were reported as revenue, the segment could reflect $12 billion annually.

“The percent of space launch that actually is just supporting their low Earth orbit constellation business… it was like 74, 75%... It’s about 9,600 satellites up there.”
— George Ferguson [08:19]

Competitive Positioning

• SpaceX remains far ahead of global competitors in launches: 160+ in last year vs. most competitors beneath 50.
• Main market expansion drivers: growing government and corporate demand for LEO satellites.
• The IPO filing underscores SpaceX’s dominant repetitive launch cadence and technological edge.

“Most of the competitors aren’t, you know, over 50. So they’re far and away... the most repetitive launch company in the world.”
— George Ferguson [09:58]

Valuation and the Starship Wildcard

• IPO valuations are “astronomical,” with bets hinging on the future of satellite-powered data centers, AI, and communications—potentially $2 trillion TAM.
• Realization of valuation is closely tied to Starship’s reliability by 2027, but technological lead provides a cushion even if timelines slip.
• Starship is critical for rapidly expanding capacity and reducing launch costs.

“You’re really buying into a big glorious vision of the future of data centers and communications on the Earth... If it works, it could be great.”
— George Ferguson [11:12 & 12:49]

On the $29 Trillion TAM and Skepticism

• The total addressable market (TAM) cited as $28.5–29 trillion is heavily dependent on the AI/data center narrative and successful hyperscale satellite deployment.

“I think you’ve got to first buy into AI is the future… and then you got to buy into a world where you can put that in space and the communication to space gets faster so there’s no latency...”
— George Ferguson [13:47]

• Ultimately, “you’re buying into Elon Musk, his vision...and his ability to execute over time.”

---

Segment 3: Bifurcation & Recovery in Real Estate

Guest: Liz Hart, President of Leasing (Newmark North America)
Timestamps: [19:38] – [25:22]

Bifurcation of the U.S. Real Estate Market

• Distinct split: prime markets (New York, San Francisco) see surging office demand—largely from AI companies—while others lag.
• AI firms have leased more space in Manhattan in Q1 than all of last year; San Francisco is also at record demand.

“You still have AI companies leasing more space in Manhattan in the first quarter than they did all of last year. You have San Francisco at record demand right now, mostly driven by those AI companies...”
— Liz Hart [20:09]

Interest Rates and Market Dynamics

• Higher-for-longer rates remain a concern, but most tech-driven tenants are focused on productivity and growth, not macro headwinds.
• Recovery is strongest at the “trophy end” (high-quality, turnkey space) in major metro markets.
• Class B space is seeing some benefit if it’s ready for occupancy—speed is now a priority.

“Starting at the beginning of last year, we actually saw a little bit of a pop in good quality class B space as long as it was ready for occupancy right away.”
— Liz Hart [22:24]

AI as a Demand Driver

• Contrary to the popular belief that AI will reduce office needs, it’s “a demand generator,” with some firms taking 100,000–400,000+ sq ft at a time.
• “Right space” is defined by quality: natural light, collaboration areas, creative finishes.

“AI is not a space reducer, it’s a demand generator... That shows us something that’s really interesting about this next generation economy.”
— Liz Hart [21:18]

Geographic Shifts and Market Outlook

• New AI demand is spreading to Bellevue, Boston, London, Singapore, with early signs in Los Angeles.
• The Southeast U.S. is an exception with consistent outperformance.
• Hart believes the bottom in commercial valuations is “behind us” in top markets; laggards are those not previously mentioned—improving but slower to recover.

---

Memorable Quotes & Moments

• “There was a lot riding on this deal coming together really given that Estée Lauder was amid a big strategic overhaul...”
  — Deb Aiken [02:13]
• “You’re really buying into a big glorious vision of the future of data centers and communications on the Earth.”
  — George Ferguson [11:12]
• “AI is not a space reducer, it’s a demand generator.”
  — Liz Hart [21:18]
• “The right space is increasingly tight... typically that means having good natural light, good open areas where people can collaborate.”
  — Liz Hart [23:25]
• “You’re buying into Elon Musk, his vision of the future and his ability to execute over time.”
  — George Ferguson [15:21]

---

Key Takeaways

• M&A Reset: The end of Estée Lauder–Puig talks highlights valuation tensions and the risk-complexity of integrating legacy brands, especially with contested intellectual property (Charlotte Tilbury).
• SpaceX Dominance: SpaceX’s internal connectivity business dwarfs its launch services; its valuation is justified only if AI/data center mega-trends materialize in orbit, with little real competition in sight.
• Real Estate Divide: AI is redefining office demand—top cities and trophy properties lead, but the cycle is uneven and rates uncertainty lingers. The right product and speed to occupancy are more critical than ever.

---

This summary captures the core themes, pivotal moments, and forward-looking insights from the May 22, 2026 episode, offering a rich context for investment professionals, deal-watchers, and anyone interested in luxury, tech, and real estate markets.

Transcript

[Host]

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[Host]

All right, let's go to one of the deals stories that had been, you know, really supporting this idea that dealmaking is back with a vengeance. Estee Lauder and Pooj it's a Spanish cosmetics luxury brands company really in talks to merge those merger talks seem to have fallen apart. Deb Aiken is our luxury goods analyst joining us right now from London. Deb, what can you tell us about why these discussions collapsed?

[Deb Aiken]

Hi we the rumors in the market, the comments in the market around the brand, which is 78, 79% owned by Pooh Charlotte Tilbury and that there is, you know, there's a put call option in place till 2031 with a view that perhaps more was expected in terms of valuation from the original owner. But really we don't know that it is that and there was a lot riding on this deal coming together really given that Estee Lauder was amid a big strategic overhaul under its CEO Stefan Della Fevery. So you know, know that there are a lot of things going on also the the added risks in the market too with what's happening in Iran, the knock on impact on to travel retail which has been with us since the middle of March. So so many different things really.

[Interviewer]

Where does Estee Lauder go from here on out then? Because they're left to focus on reviving their company. And they reported three years of annual sales drop.

[Deb Aiken]

They did. I I think if I look at both companies, the reason for them coming together was because if I think about Estee Lauder and where the market's been the last couple of years, Estee Lauder only has about 19% of its business in fragrance, whereas the majority of the business of Pooj, although it's built in makeup and skin care, its history is in fragrances with Jean Paul Gaultier and then also Carolina Herrera, Paco Rabanne and others. So it was a combination of the two of those coming together that if there was some excitement, that was it. But overall, if we think about still order, they are doing more in innovation, they are doing more in shifting online, they are doing more in cost savings. They have a huge strategy running at the moment, the profit Profit Growth Program PRGP where they're looking actually to for savings of 1 to 1.2 billion to start to come through from next fiscal year. So fiscal 27, it's been a big upfront cost and so a lot of the maybe risk and analysis and the questions on these two companies coming together were just when the growth and the profits are supposed to come through, would POOJ have inhibited that in that it would have taken them longer to turn around. So certainly today Pooj has share price is down and they're still orders is up. And that's contrary to how it was on the day when it was announced two months ago.

[Host]

Very quickly Deb, before we let you go, is Push still on the lookout for a merger partner?

[Deb Aiken]

The issue is going to be that if Charlotte Tilbury is a part of the contested deal that that carries forward and so could be a bit of a poison pill potentially. I would imagine that both of these companies are looking for acquisitions that it could make sense for both of them. Push could find more of a global platform and Estee Lauder needs for me more in fragrances. I've said that for several years so I think there were ways forward for both of them within the M and A field.

[Host]

Stay with us. More from Bloomberg Intelligence coming up after this. If your finance team spends more time finding data than using it, if there's one entity here and one here and one here and one here. If scaling your business feels like starting over, you need the Intuit erp. Intuit Enterprise Suite is the AI native ERP solution that's powerful, painless and proven. Learn [e-mail] ERP so there's a lot

[IBM Representative]

of noise about AI, but time's too tight for more promises, so let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a Global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.

[Host]

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[Interviewer]

Let's now shift gears a little bit or shift planets. I guess I was trying to make

[Host]

a solar system versus yeah yes.

[Interviewer]

Let's now bring in George Ferguson. He's Bloomberg Intelligence Senior Aerospace, Defense and Airline Analyst to discuss with us all things Space X. I feel like all this week has been all about Space X. So George, thank you for joining us. Talk to us about the slow launch revenue gain of SpaceX. We know that they dominate in global spaceflight, but I guess most missions support their own satellite Internet business rather than external customers. Can you please unpack that for us?

[George Ferguson]

Yeah. So we in the filing this week we got a chance to look at their Businesses and it was pretty remarkable I thought, the percent of space launch that actually is just supporting their low Earth orbit Constellation business. It was like 74, 75% of all launches. Again, we're supporting their Leo Constellation. It's about 9, 9,600 satellites up there. And in the first quarter of the new year, even a bit larger, it was up in the 80s. So when you look at the businesses, their launch business actually only comes in around 4 billion ish a year. Much smaller than the, than the, the connectivity business, which is that low Earth orbit satellite business. But we think that if they, if they accounted for it correctly, if they did some sort of transfer pricing and showed revenue, because they don't show revenue, they don't show sort of earned revenue for the flights for their low Earth orbit Constellation, if they showed revenue for it, we think It'd be a $12 billion business. And there's a lot of technology in that business. Interesting business to us.

[Host]

George, when you looked at the IPO filing, what did you learn about Space X's competitors, the rest of the space economy, those companies that also purport to be at the cutting edge of this industry?

[George Ferguson]

Well, I think we, we learned and it confirmed for us that their competitors are really far behind.

[IBM Representative]

Now.

[George Ferguson]

You know, I think one of the things I took away from the filing was, you know, SpaceX did something like 160 some launches last year, lots of other competitors. Most of the competitors aren't, you know, over 50. So they're far and away sort of the, you know, the, the most repetitive launch company in the world. Again, I was kind of surprised how much it was for their own Constellation because we kind of felt like demand was really growing for Leo Satel, and it is. But the sense I get from the filing is they're growing most of the demand for these low Earth orbit satellites. I think more folks, more governments, more companies will be launching low Earth orbit satellites and this space business will be a really important business. But I think that was one of the bigger takeaways from the filing.

[Interviewer]

And many, and at least some of the people I spoke to said that the entire base case depends on Starship operating at a cadence by 2027. But if Starship slips materially beyond that timeline, what do you make of that? Does that still support the current valuation of SpaceX?

[George Ferguson]

Yeah, so look, I mean the valuation is astronomical. I guess maybe pun intended. You're really buying into a big glorious vision of the future of data centers and communications on the Earth. Right? You're buying into data centers Being in space, using the sun's energy, solar panels to power them, using space to cool them, fixes a lot of problems that data centers have here on the Earth terrestrially. There's a lot of work to be done to get that to happen. You're also sort of buying into a world where we're using devices on the surface of the Earth to communicate into space and do some of our Internet and telecommunication work. That's already happening. So you're sort of buying into that big glorious future. Starship is all about lifting more of that equipment into orbit. You need sort of starships, 100 to 150, sorry, a ton capacity to get into orbit. You need them to drive down those costs of getting things into orbit. So look, I don't think starship not working by 2027 crushes this sort of view of the future. If you're buying into the IPO and it becomes 2 or 13 quarter $2 trillion IPO and you've bought in at 90 times revenue, there may be disappointment in the marketplace. I mean, honestly, again, those valuations are crazy to me. Yeah, but look, you're buying into a big tech company, but if it doesn't happen by 2027, is it the end of this sort of vision of how the future could unfold? I don't think so at all. They're far and ahead in, in launch. SpaceX is. They're thinking about data centers in space and no one else is even thinking about it. If it works, it could be great. And holding them to a time, a tight timeline I think is a bit challenging because they are really cutting edge and no one's competing for them on that cutting edge.

[Host]

The number that really got my attention in this IPO filing was this idea of a total addressable market.

[Interviewer]

Yes. I mean it was like 29 trillion,

[Host]

28 and a half trillion dollars. 29 trillion. I mean, at this point, what's a half a trillion dollars that could. How do you reverse engineer that?

[George Ferguson]

Look, all of the numbers are big and I guess the beauty about that is again, how do you reverse engineer it? And my view on it, again, look, is clearly AI and data centers has to be a persistent trend for those numbers to come true. Right. And we're seeing the beginning of AI unfold. It looks interesting in some areas. In some areas I use AI. It looks off base, it does consume a lot of energy, it does have some folks that aren't the happiest with a future. That's helping, you know, being driven by AI. So I think you gotta first you gotta buy into AI is the future. We'll do more of our thinking, more of our processes. You know, take the, I guess the droll items off all our workplates. And then you got to buy into a world where you can put that in space and the communication to space gets faster so there's no latency. So to be honest with you, we, we see those big numbers, I find them interesting. Reverse engineering them is really difficult at this point. Again, I think you really got to buy into this is a cutting edge tech company. You think you know how the future is going to and hold unfold. Elon Musk looks like the guy that will be, you know, steering these enterprises that will help this future unfold. But to sort of round out all of his numbers on what it means, I think it's kind of, kind of difficult. I think you're buying into Elon Musk, his vision of the future and his ability to execute over time.

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[Host]

There's this weird bifurcation in the markets right now because as John was telling us, stocks are higher. S&P 500 gaining 5. 10 of 1%. There's going to be a lot of big IPOs coming out like Space X, like open AI. And then you look at everything else. Oil prices are higher. Bond yields have actually given up some of their losses and are now higher, especially at the short end because the Federal Reserve Governor Christopher Waller, now says he supports making clear that the Fed's next move could be just as much a rate action increase as it could be a rate cut. So where does that leave someone who invests in real assets like real estate? Let's ask Liz Hart. I mean, it's a, it's a puzzling question.

[Interviewer]

That is true. That is true. Everyone just points to corporate earnings. But yeah, I mean, it's an interesting bifurcation in the markets. Everything is great, but you see a lot of concerns. Well, when it comes to others.

[Host]

All right, Liz Hart is joining us now. She's president of Leasing for North America at Newmark. And Liz, I know you're eager to jump in, so give us your take on how you see things out there.

[Liz Hart]

Absolutely. So I think you're right. This is a very selective recovery. We're seeing great demand in places like Manhattan and in San Francisco, where AI is certainly driving the story, as you just commented, on how much of the

[Interviewer]

sector's outlook in general depends on the path of interest rates. And how are you positioning in lieu of the changing outlook minute by minute?

[Liz Hart]

Absolutely. So it does seem that we will be at a higher for longer environment, but what we're seeing right now is the demand is still surging. You still have AI companies leasing more space in Manhattan in the first quarter than they did all of last year. You have San Francisco at record demand right now, mostly driven by those AI companies again. So it does seem as though, even though there may be a higher for longer environment, that companies are really optimizing for productivity and talent and how they can drive their businesses forward right now.

[Host]

Okay. Yeah, But New York and San Francisco are not the rest of the country. These are kind of exceptional markets. You are up in Boston right now, and when I say up, it's because we're in New York. So you're up from us.

[Liz Hart]

Yes.

[Host]

Boston is one of those places where, one of those cities where the government funding decreases for universities in Boston has really been felt, especially in the biotech sector. How do things look in places like Boston, which are so tied to universities and government funding?

[Liz Hart]

Well, I think what you're seeing really is a recovery that's starting at the trophy end of the segment. And we've talked about this before, but the trophy segment still appears to be pretty good in all of those major markets right now. Where you're seeing more of an issue is the bottom of the market where there isn't as much activity or demand.

[Interviewer]

What about how are you seeing AI? In your note, you allude to how AI is not a space reducer, it's a demand generator. But that's kind of hard for some to believe.

[Liz Hart]

Well, absolutely, but it really is driving the demand in a lot of those major markets. You're seeing companies that didn't even exist taking over 100,000 square feet and often over 3 or 400,000 square feet. And so that shows us something that's really interesting about this next generation economy is that those people who are on the cutting edge, they're choosing to be in the office. They're really choosing to prioritize how they work. And we think that's A very interesting signal of how other sectors are going to start to adopt over time and how they can drive their businesses. Because AI really will impact all of us in all sectors. It's just going to take some time to have that happen.

[Host]

So when you see the. The build out of some of these companies, particularly in San Francisco, the Bay Area, and maybe in places like in New York, where else do you see them going to? If the real estate in those cities are too expensive and they want to be able to keep their costs under control but still be able to insist on a physical footprint.

[Liz Hart]

Absolutely. So I think there's. There's two things that are happening right now in those major markets you mentioned. Starting at the beginning of last year, we actually saw a little bit of a pop in good quality class B space as long as it was ready for occupancy right away. So because there's such a rush on AI right now, people really want to build today, they don't want to wait for tomorrow. So they're looking for stuff that they can get really quick occupancy on, and that's definitely driving different categories in those high talent metric markets. In terms of other markets outside of San Francisco and New York, we're starting, starting to see AI companies go to Bellevue, definitely a little bit in Boston, London, Singapore are great markets, and even a couple that are starting to look in Los Angeles.

[Interviewer]

You also write that the issue is not that office space is tight, it's that the right space is increasingly tight. Talk to us about what the right spaces is. I mean, Scarlet made a point that everyone probably wants to be in the major cities like San Francisco, Boston, New York and others. I may have missed and many will be offended, but can you talk a little bit more about that?

[Liz Hart]

Yeah. No, they certainly want to be in high quality office space, and they want to have it as soon as they can so that they can really focus on driving their businesses forward. I mean, look, if you're looking at the quality of space, typically that means having good natural light, good open areas where people can collaborate with each other. Just high quality space has really been driving the story for quite a long time. And obviously always a bonus if it's creative for the technology sector as well, they tend to like those type of finishes.

[Interviewer]

It sounds like my apartment Hunt, Scarlett. Because I also want natural light.

[Liz Hart]

Yeah, natural light and creative finishes. That's what we all want, right?

[Interviewer]

Yeah, that.

[Host]

It's like the holy grail, both for office space and for apartments. Liz, we started off by saying how interest rates Especially in the rates market are moving higher. They're fairly elevated, you know, not just in the US but in the UK and Japan as well. How concerned are you about mortgage rates, about interest rates and how they will stay at these elevated levels for longer than maybe a lot of people anticipated.

[Liz Hart]

It's something that certainly is a factor. But again, I think with what's happening with AI and this big, you know, change that we're having is really the companies we're talking to are most focused on productivity. How do they position their business, businesses for growth and moving through this, that's something that those companies don't control. Right. So they have to live within the environment and within the moment of opportunity that they have today. And they, they have to place their bets.

[Interviewer]

Do you think we're near the bottom for commercial real estate evaluations or do you think there's going to be more pain ahead?

[Liz Hart]

It's certainly bifurcated. I think we're definitely behind. I think, you know, 2025 was a real pivot in the major markets and we're starting to can see other markets pivot over time. So I do think the bottom is behind us.

[Host]

If the bottom is behind us, which markets are lagging behind and still have a little bit of consolidation to go?

[Liz Hart]

Well, I mean it's really all the ones that we're not mentioning, you know, New York, San Francisco, those are the ones that are ahead for sure. The Southeast has been performing exceptionally well, so that's another bright spot. But there's others who still need a little bit more demand to come in and I think that we'll start to see that through the end of this year.

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[Host]

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[Podcast Announcer]

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[Host]

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[Podcast Announcer]

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[Host]

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[Podcast Announcer]

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[Host]

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[George Ferguson]

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[Podcast Announcer]

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[George Ferguson]

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