The Beauty Part

Procter & Gamble made its mark with such homely household products as Crisco, Tide and Ivory soap, but now the Cincinnati-based giant is paying up for glamour. In a move to strengthen its worldwide beauty business, P&G (1990 sales: $24 billion) last week agreed to buy the Max Factor cosmetics firm and Betrix, a German makeup and fragrance manufacturer, from Ronald Perelman's debt-burdened Revlon for $1.14 billion in cash. The deal "speeds up the global expansion of the company by at least five years," said P&G chief Edwin Artzt, who has focused on foreign growth since he took over the top job last year. "It gives us an international base in the cosmetics and fragrance business that you really need to be a major competitor in these categories."

The acquisition reflects P&G's drive to become as formidable in beauty . products as it is in packaged goods from cake mixes to disposable diapers. The company ventured into cosmetics with the 1985 purchase of Richardson-Vicks, maker of Oil of Olay skin-care creams and lotions. In 1989 it acquired Noxell, whose products include the Cover Girl and Clarion cosmetics and toiletries lines. But while P&G racked up about $500 million in sales of beauty products last year, the business was largely confined to the U.S. market. The latest deal will raise the company's beauty revenues to $1.3 billion a year, including $650 million from foreign sales. Said Artzt: "The transaction puts us in major hub markets of the world -- Japan, Germany and the United Kingdom -- which are very tough to enter from scratch." Acquisition of Betrix will also reinforce a push into East European markets that P&G began last year.

The deal means a measure of financial relief for Perelman, who acquired control of Revlon for $2.7 billion in a bitter 1985 takeover fight. To expand his cosmetics empire, Perelman subsequently paid some $300 million for Max Factor in 1986 and about $170 million for Betrix in 1989. Now, to pare his junk-bond debt, he has begun selling assets as fast as he once acquired them. What might be next? Perelman's advisers said the erstwhile raider could soon put on the block such tony cosmetics brands as Princess Marcella Borghese and Charles of the Ritz.

CHART: NOT AVAILABLE

CREDIT: TIME Chart by Steve Hart

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