Revlon said it would pay $14 a share for Elizabeth Arden, a 50% premium to the company’s closing stock price. According to an announcement in January by MacAndrews & Forbes, Revlon’s parent company, strategic alternatives would be explored for Revlon.
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Revlon Inc. agreed to buy rival Elizabeth Arden Inc. on Thursday, months after Revlon’s largest shareholder contemplated putting the cosmetics company up for sale itself.
The deal represents almost $870 million, which values Elizabeth Arden at that amount, according to a statement from Revlon announcing the decision.
Revlon said the combined company will benefit from having a presence in more markets worldwide.
Revlon said in a statement that it expects to reduce $140 million in duplicative costs between the two companies.
The real Elizabeth Arden opened her first Red Door salon on Fifth Avenue in NY in 1910. The company, now based in Miramar, Florida, sells skin-care and fragrance products in 120 countries. It posted a first-quarter profit of $11 million on sales of $439.6 million.
“Revlon plans to build upon Elizabeth Arden’s ongoing transformation by further enhancing the brand”, Revlon Chief Executive Officer Fabian Garcia said in the statement.
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The companies expect the deal to close this year. Shares of Revlon were flat in late trading, while shares of Elizabeth Arden rose 49%. Revlon shares rose slightly to $31.30.
