Beauty Industry Mergers as a Tool for Portfolio Reset
Beauty industry mergers and acquisitions are strategic transactions that companies use to sharpen brand portfolios, exit low-priority categories, and double down on high-growth labels as competition intensifies and capital costs rise. Instead of owning every possible brand, large groups are pruning, swapping, and scaling lines that can grow fast, travel globally, and command strong pricing power. This shift is driving makeup market consolidation as conglomerates focus on clearer brand portfolio strategy: selling clinical or underperforming assets, building color cosmetics platforms, and backing independent labels with cult followings. Recent moves by Waldencast, Estée Lauder, Puig and Proya show how both global and regional players are using cosmetics acquisitions and divestitures to manage balance sheets, reduce complexity, and respond to changing consumer demand for skincare, makeup, and wellness-led products.
Waldencast Bets on Milk Makeup and Balance Sheet Strength
Waldencast is reshaping itself around a single growth engine. The company agreed to sell Obagi Medical to private equity firm Bridgepoint for USD 460 million (approx. RM2,116 million), leaving it focused on Milk Makeup. Waldencast, originally created as a SPAC that acquired Obagi Medical and Milk Makeup in 2022, had aimed to build a scaled beauty and wellness platform. Instead, after a strategic review announced in August 2025, it is exiting its medical and aesthetics assets, including Novaestiq, to repair leverage. According to Waldencast’s chairman Felipe Dutra, “The sale meaningfully strengthens the company’s balance sheet and enables a sharper strategic focus on Milk Makeup, a brand with significant global growth potential.” The founders, Michel Brousset and Hind Sebti, will leave Waldencast to lead Obagi Medical with Bridgepoint, underscoring how portfolio focus sometimes means parting ways with earlier platform visions.
Puig’s Independence and Estée Lauder’s Ongoing Acquisition Appetite
Puig has become a focal point in beauty industry mergers as one of the few large, still family-controlled platforms. The group revealed it had been approached by Kering about a long-term licensing deal for its beauty brands tied to a minority stake and cash consideration, but talks ended without agreement. Kering later forged a separate strategic partnership with L’Oréal. Puig then entered merger discussions with The Estée Lauder Companies, with media reports suggesting a possible combined valuation of around USD 40 billion (approx. RM183,920 million), though this figure was never confirmed by either side. The negotiations collapsed over valuation and governance. Estée Lauder President and CEO Stephane de La Faverie said the deal failed because it was “not at the right price,” yet stressed the group remains open to acquisitions that meet growth and profitability targets, even as it reviews options for brands such as Too Faced, Smashbox and Dr. Jart+.
Proya Builds a Multi-Brand Color Cosmetics Platform
While global giants explore mega-mergers, Proya is using targeted cosmetics acquisitions to deepen its color makeup portfolio. The company increased its stake in makeup brand Flower Knows by acquiring an additional 12.6% from shareholder Yang Zifeng for CNY351 million (approx. RM233 million), bringing its indirect stake to 51%. That gives Proya control and allows it to consolidate Flower Knows into its financial results. Flower Knows generated revenue of CNY1.7 billion (approx. RM1,129 million) and net profit of CNY280 million (approx. RM186 million) last year, making it Proya’s second-largest cosmetics brand and a key pillar of its multi-brand strategy. The move comes as Proya’s core skincare business slows, while its makeup brands, including Timage and Insbaha, deliver strong growth. By securing controlling stakes rather than building from scratch, Proya is strengthening its makeup market position amid wider industry consolidation.
Indie Brands Seek Funding to Compete in a Consolidating Market
As conglomerates refine brand portfolio strategy, independent labels are turning to outside investment so they can compete rather than sell too early. Cult makeup and fragrance player Violette_FR is among smaller brands that have secured fresh funding, aiming to scale marketing, expand retail distribution, and invest in product development while staying independent. These brands see opportunity in niches that big groups move more slowly to serve, from artistry-driven color cosmetics to community-led storytelling. At the same time, the wave of beauty industry mergers means a clear potential exit path if they reach meaningful scale. Cosmetics acquisitions by larger players often target precisely these high-engagement, creative brands. For now, new capital allows indie founders to build stronger operations, improve supply chains, and push into new markets, buying time and leverage in a sector where consolidation continues to reshape the competitive landscape.