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    Natura &Co takes over Avon

    5/27/19 | 3:50 PM time

    Brazilian cosmetics group acquires direct sales specialist through share exchange

    In a press release, Avon announced that it has reached an agreement with Natura &Co for the takeover of the company. The Brazilian cosmetics group will acquire the London-based business through a share exchange, the result being a new holding company. This will make the joint venture the fourth largest cosmetics group in the world.

    Merger of Two Direct Sales Giants

    The Natura &Co business is made up of the Natura brand, Aesop and The Body Shop, which the company acquired in recent years. Both the Brazilian company and Avon are direct sales specialists. Once the acquisition is complete, the group will have contact with more than 6.3 million representatives and sell its products in 100 countries. There are also 3,200 permanent branch locations.

    This new group of companies is expected to generate an annual gross turnover of USD 10 billion. The estimated value of the entire holding company will amount to about USD 11 billion.

    Merger to Boost Development

    As a result of the acquisition and the new holding company, Natura &Co plans on saving USD 150 to 250 million annually in administrative and logistics costs. These will be reinvested in the e-commerce sector and direct sales, and at the same time spur research and development.

    Avon, on the other hand, hopes for simplification of business processes as well as modernisation and digitalisation of the brand. Beyond that, the merger will lead to easier access to innovation opportunities and a larger product portfolio.

    Establishment of Natura Holding S.A.

    Under the terms of the merger, a new Brazilian holding company, Natura Holding S.A., will be established. Avon’s owners will receive shares in this new company in a share exchange. 24 percent of the holding will be in the hands of Avon's shareholders, while approximately 76 percent will go to Natura &Co's shareholders.

    Source: Avon, photo: Adobe Stock / Rcfotostock

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