SAO PAULO: Brazil’s Natura SA said it had reached an agreement to buy rival Avon Products Inc via a share swap, creating the world’s fourth-largest beauty company with a redoubled focus on direct sales.
Under the terms of the deal, Natura will hold 76 per cent of the combined business with over $10 billion in annual revenue, according to a statement from the Brazilian cosmetics firm.
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.
Brazil is Avon’s biggest market, making up nearly a quarter of sales, but its business there has suffered in recent years due to a weak economy and stiff competition from Natura.
Now the 133-year-old, London-based company has agreed to a takeover offer of 0.3 Natura share for each Avon share, according to a securities filing. That values Avon’s equity at around $2 billion, representing a 28 per cent premium over its closing share price on May 21. — Reuters
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