Estée Lauder Cos. and Spain's Puig Brands SA are advancing in negotiations to combine, people familiar with the matter said. The proposed merger would create one of the world's largest luxury beauty players through a mostly stock deal. Both companies maintain family ownership structures, though the specifics of ownership arrangements post-merger remain unclear.

The combination would reshape the competitive landscape in premium beauty products. Industry analysts view this as a strategic move to consolidate market share in an increasingly crowded luxury beauty sector. The deal potentially gives both companies enhanced distribution capabilities and broader geographic reach, though specific financial terms have not been disclosed.

Family-owned beauty businesses rarely pursue such large-scale mergers, making this development particularly noteworthy. The transaction would signal a potential shift in strategy for established luxury brands facing changing consumer preferences and digital disruption. Industry watchers anticipate regulatory scrutiny given the significant market concentration this combination would create.