What happened:  Last week, two big-name cosmetic companies merged when Revlon (REV  ) acquired Elizabeth Arden (RDEN  ) for $419.3 million cash. 

The deal is valued at $870 million, debt included. Revlon's getting Elizabeth Arden's stock for $14/share. Because of the merger, they get $140 million in savings and increased access to worldwide markets. 

Company information:

Revlon, founded in 1932, started off producing nail enamels. Today, they are a multinational cosmetics, skin care, fragrance, and personal care company This year, they produced $439.6 in revenue, and took home a first quarter profit of $11 million. Fabian Garcia from Colgate-Palmolive (CL  ) is the new executive chief. 

Elizabeth Arden, founded in 1910, sells skin care products and fragrances in 120 countries. They are performing poorly.. Last quarter, they produced $191.9 million in revenue while incurring a loss of $28.4 million. E. Scott Beattie, Elizabeth Arden's chairman, president, and CEO, will advise Fabian Garcia as Revlon's nonexecutive vice chairman. 

Response to the deal: 

In light of the deal, Elizabeth Arden's stock rose 50% ($4.67 increase) to $13.98. Meanwhile, Revlon rose 0.5% ($.15 increase) to $31.30. 

Source: NYT, June 16