LG Household examining purchase of Elizabeth Arden

LG Household & Healthcare Ltd., one of South Korea's leading cosmetics makers, said Wednesday that it is examining an option to purchase U.S.-based Elizabeth Arden Inc.

The move, if carried out, would give the company a chance to branch out of Asia, where its cosmetics brands such as O Hui and Davi are already popular and establish a presence in the global upscale market.

As of last year, Elizabeth Arden had stores in 120 countries with sales of $1.34 billion.

"Elizabeth Arden is one of two or three companies LG Household & Healthcare is currently examining for a possible merger," said a company source.

He, however, made clear that no decision has been made on what action would be taken. The source declined to give details on other companies being considered, other than to say that they included both local and foreign companies.

"With such cases, things can easily fall through, or there can be a change in direction," the source said.

Industry experts said that should LG Household & Healthcare opt to buy the U.S. company, it likely would be the largest merger it has undertaken.

In the past, the company bought a handful of Japanese companies as well as brands such as the Face Shop and Everlife Co.

On the ability to pay for the merger, local investment bankers said that LG Household & Healthcare has consistently posted annual profits in recent years. Last year, the company's operating profit was 365 billion won (US$351 million) with its cash holdings estimated at about 1.5 trillion won. (Yonhap)