With the market hoping that the union of two aging cosmetics giants can reinvigorate both companies’ brands, Revlon Inc. is all set to acquire Elizabeth Arden Inc. for about $419 million.

New York-based Revlon said that including the debt of Elizabeth Arden, the $14-a-share deal values Elizabeth Arden at about $870 million. A 50 percent premium over Elizabeth Arden’s closing price of $9.31 is represented by the cash transaction.

Elizabeth Arden, an unprofitable company whose celebrity-branded fragrances have lost favor with consumers, has been struggling and Revlon, controlled by billionaire Ron Perelman, sees an opportunity to revive the fortunes of Elizabeth Arden.

In the hopes that a combined distribution network and marketing strategy can broaden their appeal, the merger will bring together the 84-year-old Revlon with the 106-year-old Arden business.

“We see great opportunities for growth where they are strong and we are not,” Revlon Chief Executive Officer Fabian Garcia said on a conference call.

Investors had been speculating earlier this year that Revlon might be an acquisition target — rather than a buyer. The deal marks a turnabout for investors. The acquiring possibilities and strategic alternatives for Revlon were being explored by Perelman’s investment firm, MacAndrews & Forbes and the announcement was made in January. Following the announcement shareholder wagered that a buyout of the company was in the offing which sent the shares surging.

Now instead of being acquired, another well-known cosmetics name that has struggled to maintain growth in recent years, is now the target of Revlon. Garcia said on the conference call that the deal will allow Revlon to expand its footprint in fragrances and skin care. The key regions such as China and other Asian countries where Elizabeth Arden is strong, are being viewed as potential growth opportunities, he said.

Jason Gere, an analyst at KeyBanc Capital Markets Inc., said in a note that for Elizabeth Arden, “finding a partner more capable of funding its entire portfolio is a positive development”.

“While revenue synergies may be limited from separate and distinct channels, sales within the channel can strengthen as the two entities complement each other’s weaknesses,” Gere noted.

In addition to Revlon’s existing bank loan and credit line, the payment for the acquisition and refinance Elizabeth Arden’s debt would be helped by Bank of America Corp. and Citigroup Inc. which have committed about $2.6 billion. By eliminating duplicated operations, gaining purchasing power and sharing a distribution network, Revlon expects cost savings of about $140 million from the merger.

In line with the transaction price, Elizabeth Arden shares soared as much as 48 percent to $13.79. Revlon rose as much as 8.5 percent to $33.81.

After Garcia was named as the CEO of Revlon, the company said the former Colgate-Palmolive Co. executive would revamp the business which squashed speculations that Revlon would be acquired. Citing personal reasons, Revlon’s previous CEO, Lorenzo Delpani, stepped down on March 1.

Using cash raised with the help of former junk-bond chief Michael Milken, Perelman gained control of New York-based Revlon in 1985. When he sought to take the cosmetics maker private in 2009 there were lawsuits from other investors that he agreed to settle.

Meanwhile in the past Elizabeth Arden has been a buyout prospect. After discussing acquiring the company in 2014 South Korea’s LG Household & Health Care Ltd. ultimately decided against it.

(Adapted from Bloomberg)