Brazil’s Natura buying Avon Products

The Brazilian cosmetics maker Natura announced Wednesday that it is buying Avon Products in an all-stock deal that it valued at US$3.7 billion, in a move that would create the world’s fourth-largest group of beauty products.

Shareholders of both companies would have to approve the deal. Natura said a holding company would be created, with 76 per cent of the shares going to current Natura stockholders and 24 per cent to Avon’s. Natura expects to conclude the deal in the beginning of 2020.

Founded in 1969 in the small city of Cajamar, outside São Paulo, Natura said the purchase of the American rival fits in its objective of building a brand with global reach. The Brazilian company started with a door-to-door model similar to Avon’s, but recently bought retail stores like The Body Shop.

Natura said the combination of the two companies would have gross revenue above US$10 billion a year and employ more than 40,000 people in 100 countries.

The deal could cut between US$150 million and US$250 million in costs, the Brazilian company said.

“Natura is taking a decisive step to build a global group, multi-brand and multichannel,” said Roberto Marques, CEO of the Brazilian company. “Together we will improve our growing digital capacity, our social network of representatives.”

Avon CEO Jan Zijderveld said in the same statement that the deal marks a new and exciting chapter in the company’s 130-year history.

“We will have broader access to innovation and to a portfolio of products, a stronger digital platform and electronic trade,” Zijderveld said.

– AP