New Avon to be acquired by LG Household & Health Care
New Avon LLC, the privately-held North American company that split from Avon Products, Inc. (Avon Worldwide) in 2016 has entered into a definitive agreement with South Korean consumer goods giant LG Household & Health Care, Ltd., which will purchase the direct-selling cosmetics business for $125 million in cash.
Under the deal, which has been approved by the Seoul-based company’s board of directors, LG H&H will acquire both Cerberus Capital Management’s majority interest and Avon Worldwide’s minority interest in New Avon, which is also known as Avon North America.
The transaction is expected to support LG H&H’s plans for international growth, adding a leading North American cosmetics company with a popular product assortment and some 250,000 sales representatives to its portfolio.
In turn, Avon North America – which has reportedly been struggling to turn its business around – should benefit from its new Korean owner’s R&D capabilities in cosmetics, personal care, fragrance, packaging and design.
“We recognize Avon North America's strong brand, leading market position in the region, and talented employees and Representatives,” explained LG H&H CEO Suk Cha in a release. “Avon North America's innovative social selling model builds deep connections with customers and we are excited to leverage this as we continue to expand. We look forward to building on Avon North America's success to drive customer engagement and long-term growth in this market.”
News of the transaction comes little over a month after both the North American and international versions of Avon confirmed that they were in talks with Brazilian cosmetics group Natura, discussing a deal that would potentially have reunited the two businesses under a single structure for the first time since their split three years ago.
On Thursday, Natura announced that it was still in talks with Avon Products, Inc. but declined to comment on the transaction between Avon North America and LG H&H.
According to a separate press release issued by Avon Worldwide, the deal will have no effect on the London, UK-based company’s current operations or strategy moving forward.
The transaction is expected to complete on September 30, 2019 and is subject to customary closing conditions.
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