Shares in Puig surged after Spanish financial daily Expansion reported that Estee Lauder has instructed JPMorgan to structure a 5 billion euro ($5.89 billion) financing package for a potential merger. The Spanish beauty group, which owns fashion brands like Jean Paul Gaultier and fragrance licenses, saw its stock jump 5.3% to 18.64 euros in European midday trading, building on a 25% gain year-to-date.

This development follows The Wall Street Journal's report last month that Estee Lauder was in talks to acquire Puig, though both companies then stated no final decision had been made. The latest financing preparations suggest the deal is gaining momentum, potentially creating a transatlantic beauty giant that could challenge France's L'Oreal. The Catalan company's portfolio includes both owned fashion brands and high-end fragrance licenses.

The market's positive reaction indicates investor confidence in the strategic rationale behind the potential combination. If completed, the merger would unite Estee Lauder's premium cosmetics expertise with Puig's fashion and fragrance strengths, creating a formidable competitor in the global beauty industry.