Revlon to buy Elizabeth Arden in $870 million deal

Last Updated Jun 17, 2016 9:55 AM EDT

NEW YORK -- Revlon Inc. is buying Elizabeth Arden Inc. for about $419.3 million in cash, a deal that unites two well-known names in the world of beauty and cosmetics.

The New York company is offering to buy Elizabeth Arden shares for $14 each, a premium of 50 percent. The companies value the deal at $870 million including debt.

Revlon says the combined company will benefit from having more markets worldwide. It expects savings of about $140 million from the merger.

The real Elizabeth Arden opened her first Red Door salon on Fifth Avenue in New York in 1910. The company, now based in Miramar, Florida, sells skincare and fragrance products in 120 countries.

The companies expect the deal to close this year. Elizabeth Arden shares climbed 49 percent in aftermarket trading.