March 24 (Reuters) - Shares of Puig surged around 16% on Tuesday, on track for their best trading day on record, after the Spanish beauty group and Estee Lauder said on Monday they were in talks over a potential merger.

The deal would create a $40 billion luxury beauty group and bring some of the world's biggest beauty and fragrance brands such as Tom Ford, Carolina Herrera, Rabanne and Clinique under the same roof.

Estee Lauder's New York-listed shares closed 7.7% lower on Monday.

(Reporting by Gemma Guasch in Gdansk, editing by Milla Nissi-Prussak)

By Gemma Guasch