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Estee Lauder to buy Tom Ford in US$2.8 billion deal

(Source: The Estée Lauder Companies/Facebook)

Estee Lauder has acquired luxury fashion label Tom Ford for US$2.8 billion, marking Estee Lauder’s biggest acquisition yet. 

Once the deal is completed next year, Estee Lauder will become the sole owner of the Tom Ford brand and all of its intellectual property. The company expects to fund this transaction through a combination of cash, debt and $300 million in deferred payments to the sellers that become due beginning July 2025.

“As an owned brand, this strategic acquisition will unlock new opportunities and fortify our growth plans for Tom Ford Beauty,” said Fabrizio Freda, president and CEO at Estee Lauder. 

“It will also further help to propel our momentum in the promising category of luxury beauty for the longer term, while reaffirming our commitment to being the leading pure player in global prestige beauty.”

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 next year. Domenico De Sole, chairman of Tom Ford International, will stay on as a consultant until that time.

The owner of the Zegna and Thom Browne brand, Ermenegildo Zegna Group has also signed an agreement to enter a long-term license for Tom Ford fashion with Estee Lauder. As part of this transaction, Zegna will acquire operations of the Tom Ford fashion business necessary to perform its obligations as a licensee. The brand’s current license with Marcolin will also be substantially extended.

Earlier this month, Estee Lauder cut its forecasts following trading curbs in China related to Covid.

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