Avon Products sold to Brazilian beauty retailer Natura & Co

Lloyd Doyle
May 23, 2019

Natura Cosmeticos and Avon confirmed yesterday that they were in advanced talks about an all-share merger, sending shares in Avon up by as much as 16.3 per cent.

After Natura pushed into high-end retail shops with the acquisitions of Aesop in 2013 and The Body Shop in 2017, the takeover of its biggest rival in direct sales is a renewed bet on the company's core business of door-to-door distribution.

Natura has a commanding lead in Brazil's direct sales market, according to research group Euromonitor, which estimates a 31% market share for the company, followed by a almost 16% share for Avon. Based on a fixed exchange ratio of 0.3 Natura Holding shares for each share of Avon common stock, Avon shareholders will hold about 24% of the combined company, with Natura holding 76%.

In 2016, the company said it was moving its headquarters from NY to the United Kingdom "over time" while cutting 2,500 jobs worldwide as part of a turnaround plan.

At the same time, Avon sold its U.S. operations to investment fund Cerberus.

In April, LG Household & Health Care agreed to acquire both Avon and Cerberus' stakes in the USA business.

Avon already has 2.2 million direct marketing consultants in Brazil.

The Avon lady has a new boss: Natura & Co., a Brazilian personal care company, said Wednesday it's acquiring the famed cosmetics brand to create the fourth-largest global beauty company.

L'Oreal bought the business for around €940m in 2006 at the height of its success but it has failed to thrive since.

Other reports by Iphone Fresh

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