Revlon To Buy Elizabeth Arden For £300m

The cosmetics and beauty firm Revlon (NYSE: REV - news) has confirmed a $419m (£300m) deal to buy rival Elizabeth Arden (NasdaqGS: RDEN - news) .

New York-based Revlon - best known for its make-up and hair colour products - said it was buying the loss-making company to broaden its world presence and expand into skin care and perfume ranges.

It (Other OTC: ITGL - news) expected cost savings of $140m over three to five years once the all-cash deal is completed - adding it was worth $870m when debt was included.

Elizabeth Arden's shares jumped 50% in after-hours trading when news of the tie-up broke.

It recently posted a loss of $28.4m for the first three months of the year.

Elizabeth Arden opened her first Red Door salon on New York's Fifth Avenue in 1910.

The company now sells skin-care and fragrance products in 120 countries but has struggled to win favour for its celebrity-endorsed scents.

Revlon has secured financing for the purchase which will also chip away at its own debt pile.

New (KOSDAQ: 160550.KQ - news) chief executive Fabian Garcia will run the expanded business following the deal, which is expected to complete later this year.

Scott Beattie, Elizabeth Arden's chairman, will remain but in an advisory role.