The US cosmetics giant Estée Lauder has walked away from merger talks with Spanish rival Puig, scrapping plans to create a fashion and beauty behemoth worth nearly $40bn (£30bn/€34.5bn). The deal collapsed because the two families controlling the companies couldn't agree on who would hold the balance of power - a classic case of 'my mascara wand is bigger than yours.'

Estée Lauder, the skincare, makeup and fragrance titan behind Clinique, Bobbi Brown and Tom Ford Beauty, confirmed Thursday that "the parties have terminated discussions regarding a potential business combination." The talks, first leaked in March, reportedly hit snags over board seat allocation and which controlling family would dominate the merged entity. Bloomberg added another wrinkle: Charlotte Tilbury - one of the UK's richest beauty entrepreneurs - demanded a compensation package that apparently made the deal even less appealing.

Stéphane de La Faverie, Estée Lauder's CEO, struck a diplomatic tone: "We are grateful for the conversations we have had with Puig. Today, we are re-iterating our confidence in the power of our incredible brands, our talented teams and our strength as a standalone company." Translation: 'Thanks, but we'll keep our Clinique and our independence.'

Investors, who had been less than thrilled - Estée Lauder's market value dropped about a fifth after the talks became public - breathed a collective sigh of relief. Shares climbed 11.5% in post-market trading Thursday. The Lauder family, which controls the 1946-founded company through a dual-class voting structure, owns about 38% of shares but wields over 80% of voting power. That's a lot of say in who gets to sit where.

Puig, which floated on the Madrid stock market two years ago and owns Jean Paul Gaultier, Charlotte Tilbury, Carolina Herrera and Dries van Noten, had a more volatile ride. Its shares surged 15% when the merger was announced, then plunged the same amount when it collapsed. The Puig family, which founded the business 110 years ago, still controls most voting rights. José Manuel Albesa, Puig's first non-family CEO, said the company "appreciate[d] the meaningful conversations" but insisted the decision "does not alter our strategic roadmap." Puig has acquired 11 fragrance and fashion brands between 2011 and 2024, so they're not exactly crying into their Carolina Herrera perfume.