Concern "Kalina", Russia's biggest producer of perfumery, cosmetics and household chemicals. (RIA Novosti / Pavel Lysizin)

Global consumer giant Unilever has announced it will pay €390 million for an 82% stake in Russian personal care products producer, Kalina.

The move, which is subject to regulatory approval from Russian competition authorities, values Kalina at €500 million, or 21.5 billion roubles.Kalina, based in Ekaterinburg, is forecasting a FY 2011 turnover of €303 million, and has skin and hair care, and oral hygiene products making it a Russian market leader.

Unilever CEO, Paul Polman, says the purchase will transform the global giant’s position in the Russian personal care sector, fulfilling a range of criteria including a fast growing market, extensive and well respected brand portfolio.

"We are delighted to be acquiring Concern Kalina. This will transform Unilever's personal care business in Russia, giving us leading positions in skin care and hair care, as well as establishing a presence in oral care. It will also strengthen and re-balance Unilever's portfolio and competitive position in Russia, an emerging market with considerable potential and one of our priority countries."

Kalina CEO Alexander Petrov, said the purchase of the majority stake by a global giant is a vote of confidence in the strategy of the Russian company.

"The coming together of our company with one of the most successful and best-known global companies represents a tremendous vote of confidence in the strength of our brands, the people who have built them and the potential of the Russian market. The combination with Unilever will also provide our employees with opportunities in one of the best companies in the world."

Kalina and Unilever expect the acquisition to be completed by the end of the year, with Unilever planning to launch a mandatory tender offer for the minority holding after that. The announcement came after a report overnight in the Wall Street Journal saw Kalina shares jump more than 40% on Friday Morning in Moscow.