American cosmetics maker Estee Lauder is set to buy fashion designer Tom Ford for $2.8 billion.
Estée Lauder expects to fund the transaction with cash and loans, with $300 million in deferred installments for the sellers due in July 2025.
The transaction is expected to be completed during the first half of last year.
According to the terms of the deal, Tom Ford, founder and CEO of Tom Ford International, will continue in his position until the end of 2023, while Dominique de Sol, Chairman of Tom Ford International, will continue as an advisor to the company during the same period.
Estée Lauder expects that the deal will reduce the profits of its shareholders, after putting seasonal variables into account, by between 0.05 and 0.15 dollars per share due to expenses related to the time of the deal, while it expects its impact on profits to diminish during the fiscal year 2024.
The deal extends and expands Tom Ford’s long-standing relationships with Italian luxury fashion house Ermenegildo Zenga, including a long-term license to Zegna’s men’s and women’s apparel, luxury goods and underwear.
