Why was Estee Lauder Companies interested in acquring M-A-C Cosmetics?

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vixen999 | High School Teacher | (Level 2) Adjunct Educator

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Speaking from experience with corporate strategy and acquisitions, it seems Estee Lauder is trying to broaden its appeal to different markets.  This New York Times states:

With a recent string of acquisitions and licensing arrangements, Estee Lauder has sought to become an industry powerhouse that has something for everyone from trendy schoolgirls to mature women.

'Lauder has not only been an entrepreneurial organization but it has been acquiring entrepreneurial companies,'said Allan Mottus, a consultant to the beauty industry and publisher of the Informationist, a trade publication. 'So it fits with what they are doing.'

The article goes on to say that the company acquired MAC because it is a "flamboyant" brand that appeals to the fashion-conscious and fashion industry.

Another point to note is that Estee Lauder appears to be looking specifically for entrepreneurial companies.  This implies that the company likes the entrepreneurial approach to business.  It may be that Estee Lauder cannot create that environment in its own companies, but is seeking to acquire those companies that already have this environment.  If this is true, it would indicate that Estee Lauder wants to benefit from having these companies/brands in its portfolio but does not intend to micromanage these companies and instead, will let them build on what they are already doing to become more even more successful.


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