Estée Lauder to buy Tom Ford brand for 2.3 billion dollars

The Estée Lauder Companies Inc.(ELC) has signed an agreement to acquire the Tom Ford brand.

The company said in a release that the deal values the total enterprise at 2.8 billion dollars and the amount to be paid by ELC for the acquisition is approximately 2.3 billion dollars.

Commenting on the development, Fabrizio Freda, president and chief executive officer, The Estée Lauder Companies said: “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,” Freda added.

Estee Lauder to strengthen Tom Ford Beauty brand

Tom Ford Beauty was first introduced by ELC in 2006, which is a luxury beauty brand offering a collection of fragrance, makeup, and skin care.

In ELC’s fiscal year ended June 30, 2022, Tom Ford Beauty achieved nearly 25 percent net sales growth as compared to the prior year, and over the next couple of years, the company expects that the brand will achieve annual net sales of one billion dollars. “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,” said Tom Ford

He added saying: “Ermenegildo Zegna and Marcolin have been spectacular long-standing partners as well and I am happy to see the preservation of the great relationship that we have built over the past 16 years.”

The company further said that the brand continues to have strong momentum across channels and key markets resulting in a fragrance ranking in the top 15 in the United States and top 10 in China and the brand has received over twenty awards from The Fragrance Foundation.

Commenting on the acquisition of Tom Ford by ELC, Domenico De Sole, co-founder and chairman of Tom Ford International said: “I view The Estée Lauder Companies, the first partner in our Tom Ford journey, as the trusted party to continue the extraordinary legacy of the brand.”

Zegna Group to enter a long-term licence with ELC for Tom Ford Fashion

ELC expects this transaction to be dilutive to adjusted diluted earnings per share in fiscal 2023 by negative 5 cents to negative 15 cents, primarily from one time acquisition-related costs. For fiscal 2024, the transaction is anticipated to be roughly neutral to adjusted diluted EPS.

Under the agreement, Tom Ford, founder and CEO of Tom Ford International, will continue to serve as the brand’s creative visionary after closing and through the end of calendar 2023. Domenico De Sole, chairman of Tom Ford International, will stay on as a consultant until that same time.

The company added that this deal will extend and expand the Tom Ford brand’s long standing relationship with Ermenegildo Zegna N.V. to include a long-term licence for all men’s and women’s fashion as well as accessories and underwear.

The brand’s current licence with global eyewear manufacturer Marcolin, will also be substantially extended.