NEW YORK, Nov. 19 /PRNewswire/ -- The Estee Lauder Companies Inc.
(NYSE: EL) and Aveda Corporation announced today that they have signed an
agreement by which the Estee Lauder Companies will purchase Aveda Corporation,
a premium manufacturer and marketer of pure and natural hair, skin, makeup and
body care products, which use the science of flower and plant aromatherapy.
    The all cash purchase price is $300 million.  The transaction is subject
to certain conditions, including expiration of the Hart-Scott-Rodino waiting
period, and is expected to be completed in early December.
    Founded in 1978 by Horst Rechelbacher, Aveda Corporation is a leader in
the U.S. prestige hair care industry and among the fastest growing companies
in this segment.  The company's products are sold primarily through
distributors to about 30,000 professional salons worldwide.  Some 2,000 of
these are Aveda's concept salons which sell Aveda products exclusively.  Aveda
products are also sold in over 130 Aveda lifestyle stores and a limited number
of department stores.  Predominantly marketed in the U.S., Aveda products are
available in certain international markets, including the U.K., Australia and
Italy.
    Commenting on the agreement, Leonard A. Lauder, Chairman and Chief
Executive Officer of The Estee Lauder Companies Inc., said, "The acquisition
of Aveda is another step in our  strategy of strengthening our position as a
leader in the global beauty business.  We are particularly attracted to three
factors:  Aveda's strong position in the premium hair care segment, which is a
rapidly growing category; its distribution through professional salons, which
is a new channel of distribution for us; and its significant potential for
growth in international markets, where its presence is underdeveloped.
Additionally, Aveda occupies a unique market position which complements our
other brands; it has experienced remarkable growth -- nearly 20% compounded
over the last five years;  and its management, led by founder Horst
Rechelbacher, is truly entrepreneurial.
    "Considering all these factors, we believe that Aveda Corporation has the
potential to become a significant contributor to the Estee Lauder Companies
within the next five years.  We are very pleased to add Aveda to our portfolio
of quality brands and to strengthen its presence in the U.S. and expand its
international reach."
    Horst Rechelbacher, Chairman and Founder of Aveda Corporation, said,
"Since founding the company nearly 20 years ago, we have been committed to
bringing the Aveda philosophy to as many consumers as possible.  Following our
rapid growth in the U.S., we are now in a position to expand our presence in
the U.S. and international markets.  We believe that the Estee Lauder
Companies' strong heritage of quality, innovation and service, as well as its
huge international presence, will be a great asset as we fulfill our plans for
growth."
    Aveda products are created with freshly distilled plants and flower
essences obtained from sources all over the world.  Aveda incorporates its
human studies of the physiological and psychological effects of botanical
ingredients to develop its broad range of products.  Some of these include
Shampure, Pure-fumes and the All-Sensitive line.
    Headquartered in Minneapolis, Aveda maintains a major manufacturing
facility there, as well as the Aveda Institute which is a professional
education center, offering professional courses in all aspects of hair, skin
and body care.  The Institute trains some of the most successful entrepreneurs
in the field.
    Aveda Corporation headquarters will remain in Minneapolis and Horst
Rechelbacher will continue in his role as Chairman of the company.
    The Estee Lauder Companies Inc. is one of the world's leading
manufacturers and marketers of quality skin care, makeup and fragrance
products.  Its brands are sold in more than 100 markets under well-recognized
names including Estee Lauder, Clinique, Aramis, Prescriptives, Origins, M*A*C,
Bobbi Brown essentials, Tommy Hilfiger, jane and, in the near future, Donna
Karan.  For the fiscal year ended June 30, 1997, the Estee Lauder Companies
had annual revenues of $3.4 billion and net earnings of $198 million.
    The forward-looking statements in this press release involve risks and
uncertainties some of which are detailed in Exhibit 99.1 to the Company's
report on Form 10-Q for the quarter ended December 31, 1996 previously filed
with the SEC.
    Estee Lauder press releases are available at no charge through Estee
Lauder Companies News On-Call fax service.  For a menu of Estee Lauder press
releases or to retrieve a specific release, call 800-758-5804, extension
251850, or use the Internet via
http://www.prnewswire.com/cnoc/exec/menu?251850/

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