Revlon set to buy Elizabeth Arden in $870m deal

Cosmetics firm Revlon has agreed to buy Elizabeth Arden in a $870m (£609m) deal that it says will help expand its global footprint.

Revlon said it would pay 14 USA dollars (£9.8) per share in cash for Elizabeth Arden, a 50% premium on Thursday’s closing share price.

About 25.7 million of Elizabeth Arden’s shares were traded so far today vs. its average volume of 84,003 shares per day. Through this deal, Revlon expects the two companies to earn some $3 billion together, and hopes to make profits from Elizabeth Arden’s growing markets in the Asia-Pacific and other regions, BBC reported.

But “celebrity fragrances, a key part of Elizabeth Arden’s portfolio, have fallen out of favor” in recent years, Sharon Terlep reports for the Wall Street Journal.

Fabian Garcia, president and chief executive officer of Revlon, said the deal – expected to complete by the end of 2016 – was strategically and financially compelling.

It said the move would bring cost savings of 140 million United States dollars (£98 million) by losing “duplicate activities”, “leveraging purchasing scale” and capitalising on the “manufacturing and distribution network of the combined company”. Revlon tacked on 15 cents, or 0.5 percent, to $31.30.

In addition to offering skin care and makeup, Elizabeth Arden is known for selling fragrances under names such as Taylor Swift, Britney Spears and Elizabeth Taylor.

Smith & Wesson Holding Corp (SWHC) jumped 7.4% or $1.62 to $23.37 after the firearms maker said net sales in the fourth-quarter ending in April soared 22.2% from a year ago to $221.1 million.

Scott Beattie is committed to executing on Elizabeth Arden’s business plans and it is expected that he will join Revlon’s Board of Directors as non-executive Vice Chairman.