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The Estée Lauder Companies has announced today that it will acquire Tom Ford in a deal valued at approximately US$2.8 billion (A$4.15 billion).
The landmark deal, which is Estée Lauder’s biggest acquisition to date, will see Tom Ford join brands like Bobbi Brown, Clinique, Jo Malone and Le Labo under the Estée Lauder beauty umbrella. The cosmetics conglomerate already has a licensing agreement for Tom Ford’s bestselling fragrance and beauty lines until 2030 but will expand into the world of fashion as part of the acquisition.
In taking ownership of the brand’s ready-to-wear brand, Estée Lauder will extend and expand Tom Ford’s longstanding relationship with Ermenegildo Zegna. As for its eyewear range, Tom Ford’s license with Marcolin will also be “substantially extended”.
The multi-billion dollar deal will see founder and CEO Tom Ford continue to serve as the brand’s creative leader until the end of next year. In a press release, Ford expressed his satisfaction with the deal and said he was happy to see the preservation of the great relationship the company had built with both Ermenegildo Zegna and Marcolin over the past 16 years.
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.
Tom Ford, Founder and CEO of Tom Ford
President and CEO of The Estée Lauder Companies, Fabrizio Freda, said the group is “incredibly proud” of the success Tom Ford has achieved in the luxury fragrance and makeup space.
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.
Fabrizio Freda, President and CEO of The Estée Lauder Companies
According to a press release, Tom Ford’s beauty business is positioned to achieve annual net sales of US$1 billion over the next couple of years. Thanks to best-sellers like Tom Ford’s Black Orchid eau de parfum, the brand has already achieved close to 25 per cent sales growth from last financial year.
Estée Lauder said it would finance the multi-billion dollar deal with a combination of cash, debt and US$300 million in deferred payments.