Tom Ford is a newly minted billionaire, thanks to his $2.8 billion Estée Lauder deal

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CNN Business
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A huge deal to sell his eponymous brand pushed fashion designer Tom Ford into the global billionaires’ club.

Ford, 61, who launched the Tom Ford brand in 2005 and developed it into a luxury apparel and accessories powerhouse, sold his company on Tuesday to Estée Lauder Companies.

(EL) In a deal worth $2.8 billion.

Estée Lauder’s acquisition of Tom Ford Brands is expected to close in the first half of next year, pending regulatory approvals. The deal will fully integrate Tom Ford Brands, which already has an ongoing partnership with the cosmetics and skincare giant, into Estée Lauder’s diversified portfolio.

The two companies have been partners for more than 15 years after launching the Tom Ford Beauty brand together in 2006.

As a result of the sale, Ford has now joined the ranks of global billionaires. to me ForbesAnd the That estimates the designer, who owns roughly 64% of his company, will get about $1.1 billion in cash from the sale after estimated taxes. Ford’s current portfolio also includes at least two homes, one in Los Angeles and one in New York City, valued at a combined $65 million.

According to the statement, Ford will remain the “creative visionary” for the brand after the deal closes and remain in that role through the end of 2023.

Domenico De Sole, chairman of the Ford brand who previously led Gucci, will also remain as an advisor during the same period.

The companies said the deal, which will be settled through a combination of cash, debt and deferred payments that will be due in 2025, will allow two of Tom Ford’s existing partners, Ermenegildo Zegna and Marcolin, to extend their existing licensing agreements.

Italian fashion house Zegna will expand its existing arrangement “to include a long-term license for all men’s and women’s fashion, as well as accessories and lingerie,” the company said. Marcolin will continue to make sunglasses and optical frames under the Ford brand.

The Estée Lauder Companies, which includes many international beauty brands including Clinique and Bobbi Brown, He said It expects annual sales of Tom Ford cosmetics to reach $1 billion “within the next two years”.

“As an owned brand, this strategic acquisition will open new opportunities and advance our growth plans for Tom Ford Beauty,” said President and CEO of The Estée Lauder Companies Fabrizio Freda in a statement.

Born in Austin, Texas, in 1961, Ford studied art history at New York University and later architecture at Parsons School of Design in New York and Paris. He moved to Milan in 1990 where he started his fashion career as a womenswear designer at Gucci. A few years later, he was appointed creative director and was responsible for all Gucci product lines, from clothing to perfume.

During his 10 years in the position, Gucci’s sales increased from $230 million to more than $3 billion. In 2005, Ford started out on his own and launched his own company.

Ford said in a statement that he “couldn’t be happier with this acquisition because Estée Lauder Companies is the perfect home for the brand.”

“They have been an exceptional partner from day one of the company’s founding, and I am delighted to see them become our welfare agents in this next chapter,” he said.

– CNN’s Pareja Cavillans contributed to this story.