Cosmetics maker Revlon has agreed to buy Elizabeth Arden in a $870m deal to strengthen its skincare and fragrance business and expand in high-growth markets including the Asia-Pacific region.
The deal comes less than six months after billionaire Ron Perelman said he would seek strategic alternatives for Revlon.
It will help the companies better compete with deep-pocketed rivals such Estee Lauder and L'Oreal.
The equity value of the deal is $419m, based on Elizabeth Arden's outstanding shares as of May 3.
Elizabeth Arden has a strong presence in the luxury skincare market, mainly in the anti-aging category, with brands such as Prevage, Ceramide and SuperStart.
Its fragrances include those licensed from celebrities such as Britney Spears, Justin Bieber and Taylor Swift.
Revlon is stronger in hair colour and colour cosmetics, which are mainly distributed through mass retail channels and beauty salons across 130 countries.
"The combination will leverage Revlon's scale across major vendors and manufacturing partners, improving distribution and procurement," the companies said, adding that they expected cost synergies of about $140m from the deal.
Elizabeth Arden has reported lower than expected revenue in six of the past eight quarters as it loses customers to rivals with more exclusive offerings.
Revlon also said it expected 2016 net sales of $2-2.1 billion on a constant-currency basis, excluding the impact of the acquisition.
This implies a "high single-digit growth rate" in net sales, the company said.
Revlon also forecast adjusted earnings before interest, tax, depreciation and amortization of $400-420m for the year.
