The Estée Lauder Companies Inc. (NYSE:EL) is nearing a deal to buy Tom Ford International, LLC for about $2.8 billion, including debt, beating out competition from a number of others interested in acquiring the luxury fashion brand, said people briefed about the matter. Tom Ford has this week entered exclusive negotiations with Estée Lauder, which sells cosmetic brands such as MAC, Clinique and Aveda, and a deal could be announced as early as November 14, 2022, those people said. A deal between the two brands would highlight the strength of a luxury fashion and cosmetics market which has continued to be resilient in the face of rising inflation and supply chain disruptions.

Estée Lauder the acquisition of Tom Ford would be its biggest and latest in a series of transactions, including taking full control of Canadian beauty group Deciem for about $1 billion in 2021. Goldman Sachs was hired to explore a sale of Tom Ford earlier in the year 2022 and has received interest from other luxury brands including Gucci owner Kering SA (ENXTPA:KER). Estée Lauder already has a longstanding licensing agreement for Tom Ford's beauty and fragrance products, which could have complicated a deal with Kering.

As part of the combination with Tom Ford, which was launched by the eponymous fashion designer in 2005, Estée Lauder would also acquire the apparel business, an area that it has relatively little experience in. The Wall Street Journal reported last week that Kering was in advanced discussions to buy Tom Ford for about $3 billion, placing itself ahead of Estée Lauder. However, the talks with the Gucci owner fell apart as the two sides struggled to reach an agreement on a number of fronts, said people briefed about the matter.