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Estee Lauder Cos. acquires luxury powerhouse Tom Ford in a deal valued at $2.8 billion, the beauty company’s largest acquisition to date.
As part of the deal announced on Tuesday, Ermenegildo Zegna Group and Marcolin SpA will enter into long-term licensing agreements for Tom Ford fashion and Tom Ford eyewear, respectively.
While Estee Lauder said the deal values the company at $2.8 billion in total, the New York-based beauty company is expected to pay about $2.3 billion after Italian eyewear maker Marcolin SpA paid $250 million.
The acquisition, which is subject to regulatory approval, will close in the first half of 2023.
According to the agreement, the founder and CEO of Tom Ford International will remain the creative visionary of the brand until the end of 2023. Tom Ford International chairman Domenico De Sole will continue as a consultant until then.
Estee Lauder introduced its Tom Ford Beauty line in 2006. In Estee Lauder’s financial year ending June 30, the brand’s sales revenue increased by nearly 25% compared to the previous year. The beauty company announced that in the coming years, the sales revenue of the beauty line is expected to reach 1 billion dollars.
“This strategic acquisition opens up new opportunities and strengthens our growth plans for Tom Ford Beauty,” Estee Lauder President and CEO Fabrizio Freda said in a statement. “This will further advance our momentum in the long-term promising luxury beauty category, while reaffirming our commitment to being the world’s leading maker of prestige beauty.”
Estee Lauder said it aims to finance the acquisition through a combination of cash, debt and $300 million in deferred payments to sellers due in July 2025.
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