New York-based Estée Lauder Cos. has agreed to buy Tom Ford for $2.8 billion, according to a source close to the beauty conglomerate.

The completion of the deal, which was first reported by the Wall Street Journal, is slated to be announced on Tuesday. While Estée Lauder is the main buyer, there may be multiple partners involved, as the beauty conglomerate is unlikely to attempt to enter the ultra-competitive luxury fashion space on its own. Early reports valued the Tom Ford brand at $3 billion.

Representatives for both companies did not immediately respond to requests for comment.

Estée Lauder was reportedly in competition with Ford’s former employer, the European fashion group Kering — which owns Gucci, Yves Saint Laurent and Balenciaga — to purchase the Los Angeles-based luxury brand. (In the 1990s, Ford rose to fame transforming Gucci from a worn-out Italian heritage label into the hottest fashion line of the decade.) Kering, with which Ford and his business partner, Domenico De Sole, parted ways in 2004, is said to be interested in developing its own beauty business, and owning a brand like Tom Ford — known for its suiting and glitzy womenswear, but that primarily makes money on cosmetics and fragrance — may have been an interesting prospect.

For Estée Lauder, which launched the Tom Ford brand in 2005 as its official beauty partner, severing ties — and losing the profits it makes on its skin care, makeup and perfume — would be detrimental, according to one of the beauty conglomerate’s former executives. Owning Tom Ford outright will generate more profits for the group, which has shifted its business away from less lucrative licensing agreements in recent years. Tom Ford also sits squarely in the prestige makeup and fragrance categories, which grew 18 percent and 13 percent, respectively, during the second quarter of 2022, according to NPD.

However, the fashion and accessories business has never been more difficult to break into now that a handful of European heavyweights control the supply chain, and it’s unlikely that Estée Lauder is interested in entering that market on its own.

Ermenegildo Zegna Group, which has built a robust menswear business through its namesake line, but also through the acquisition of American label Thom Browne, has held the license to Tom Ford men’s apparel and footwear for the past 16 years. Eyewear group Marcolin has produced and distributed Tom Ford optical frames and sunglasses since 2005.

They may very well continue to do so after this deal, although it’s unclear what is going to happen with Ford’s womenswear collection.

Additional reporting by Rachel Strugatz.