Estee Lauder is nearing a deal to combine with the Barcelona-based beauty group Puig, which would create a $40 billion beauty giant, The Financial Times reported Monday.

Shares of Estee Lauder were down 8%.

The deal could be announced as early as Monday, the report said, citing people familiar with the matter, adding that the exact terms of the potential tie-up were not known and it could still come apart.

Puig, the company behind perfume brands Rabanne, Carolina Herrera and Jean Paul Gaultier, had completed Spain's biggest initial public offering in nearly a decade in 2024.