Brazil's Natura acquires Avon Products
Brazil’s Natura said on Wednesday it has finalised an agreement to buy U.S. cosmetics competitor Avon Products, making it the world’s fourth-largest cosmetics company.
Under the terms of the agreement, Natura shareholders will hold 76% of the combined company with annual revenue over $10 billion, according to a filing issued late on Wednesday.
As part of this transaction, a new Brazilian holding company, Natura Holding S.A., has been created, added the South American company.
The mega cosmetic group will have a combined 6.3 million consultants and representatives, a global footprint through 3,200 stores, as well as an expanded digital presence across all companies, it added.
The deal is expected to generate annual cost savings of $150 million to $250 million, Natura added. Avon Products shares were up 9 percent at end of trade to $3.49.
Avon Products has been facing global sales headwinds of late. Earlier this month, Avon said it missed first-quarter revenue estimates, hurt by lower number of direct sales representatives in Europe, Middle East & Africa and South Latin America.
For the quarter, total revenue fell 15 percent to $1.19 billion and missed analysts' average estimate of $1.24 billion, according to IBES data from Refinitiv.
In April, the company's struggling North America subsidiary, Avon North America, was sold by investment firm Cerberus Capital Management to LG Household & Health Care for $125 million.
In 2017, Natura acquired L'Oreal's The Body Shop for around $1 billion.
Natura & Co.'s portfolio includes Natura, The Body Shop and Aesop, in addition to newly signed on Avon.
Copyright © 2023 FashionNetwork.com All rights reserved.