US cosmetics giant Estée Lauder is discussing a potential merger with Puig, the Spanish company behind best-selling fragrances such as Rabanne and Jean Paul Gaultier.
Estée Lauder is one of the world's leading manufacturers of skin care, make-up and fragrances, owning brands such as Clinique, Bobbi Brown and Tom Ford.
A deal could create a $40bn (£30bn) beauty giant, according to Financial Times, although Estee Lauder said that no final decision had been made.
"Unless and until an agreement is signed between the companies, there can be no assurances regarding the deal or its terms," it said in a statement.
Puig, which is based in Barcelona, was founded in 1914 and is still controlled by the Puig Family.
