Thursday, 24 April 2014 00:00
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REUTERS: South Korea’s LG Household & Healthcare Ltd. said it is considering a bid for US cosmetics firm Elizabeth Arden Inc, an acquisition that would give it globally recognised luxury brands and would be its most ambitious to date.
Elizabeth Arden, which has a market value of $ 845 million, has seen its sales hit by a much weaker-than-expected North American retail market as well as deep industry discounting in key European markets that have eroded profit margins. Its shares have fallen 20% so far this year.
LG Household, keen to expand its product lines and reach, has completed 12 acquisitions since 2007, though the biggest of these has been a relatively small $ 375 million purchase of a local retailer.
Four of its five latest deals were overseas acquisitions, including Japanese cosmetics firm Everlife and Canadian retailer Fruits & Passion.
“LG Household has grown so far based on M&A. We are looking at several potential deals at the moment for the same reasons, and Elizabeth Arden is one potential option,” said a company spokesman, responding to a report in the Maeil Business Newspaper about the potential bid.
“We are considering both local and overseas deals,” he added.
Representatives for Elizabeth Arden could not be immediately reached for comment outside of regular US business hours.
LG Household, No. 2 in the South Korean cosmetics market with brands such as Whoo and O Hui, saw its shares climb 3% in a flat market on hopes that Elizabeth Arden would provide it with a new growth engine.
