Revlon acquires Elizabeth Arden, adding prestige beauty
Revlon is acquiring the outstanding shares of Elizabeth Arden, paying $14 for each—$870m all told. And, both companies’ brands are expected to benefit from the “expanded category mix,” “channel diversification,” and “broader geographic footprint,” that the combined business will have.
Fabian Garcia, president and CEO of Revlon says,“this acquisition is strategically and financially compelling.” Indeed, Revlon and Elizabeth Arden “anticipate that they will achieve additional growth opportunities in both sales channels and geographies,” according to the companies’ joint press release.
Winning and losing
The two multinational beauty companies will save costs by eliminating redundancies. “Cost synergies of approximately $140 million are expected to be achieved through the elimination of duplicative activities,” affirms the Revlon – Elizabeth Arden release, “leveraging purchasing scale, and optimizing the manufacturing and distribution networks of the combined company.”
Revlon is gaining prestige fragrance brands, prestige skin care, and prestige color cosmetics in the deal, “highly profitable categories that are key to future industry growth,” notes the company in remarks about the strategic benefits of the deal.
Pending regulatory clearances and the approval of Elizabeth Arden’s shareholders, the deal is expected to close at the end of the year.
Current Elizabeth Arden chairman, president, and CEO Scott Beattie will stay with the company. According to the press release, he “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.”
And at least as long as the changeover takes, “he will also serve as a senior advisor to Fabian Garcia, Revlon’s President and CEO, to ensure a successful integration and transition.”
Eye to the future
The companies’ release notes that “Elizabeth Arden and Revlon are both known for their iconic brands, entrepreneurial spirit and commitment to innovation, quality and excellence.” It’s also fair to say that Elizabeth Arden and Charles Revson, the two company founders, had a well know rivalry. And several industry commentators are sure that Ms. Arden (who died in 1966) is rolling over in her grave at the news of this acquisition.
However, current company leaders are of course looking to the future. “Revlon plans to build upon Elizabeth Arden’s ongoing transformation by further enhancing the brand, with even more vibrant and relevant product development and marketing, while carefully preserving its unique heritage within prestige,” says Garcia.
“Combining our brands, talent, and global distribution will give our company a significant presence in all major channels and categories, while accelerating sales growth in existing and new geographic regions,” he believes. “We look forward to bringing together our two top-notch teams to form a global leader in beauty.”