Natura to Buy Avon Products for About $2B in Stock
Brazil’s Natura Cosmeticos SA agreed to buy rival Avon Products Inc. in an all-stock deal valued at about $2 billion, positioning it as a growing force in the booming global cosmetics and skincare industry. Controlling shareholders of Natura, which bought the Body Shop retail chain in 2017, will form a new publicly traded holding company that will offer 0.3 share for every share of London-based Avon, according to a statement. The acquisition brings together the largest direct sellers in the global cosmetics business. The combined businesses will have more than 6 million direct sellers, 3,200 stores and operations in 100 countries, according to the companies.
Total Retail's Take: Natura's recent purchase of Body Shop and now its acquisition of Avon bolsters the brand on a global level, enabling it to leverage Avon's direct sales model with Body Shop's brick-and-mortar stores to give shoppers more ways to engage with and purchase from the brand. Already established in South America and Latin America, Natura is strengthening its operations in the U.S. to better compete with L’Oreal SA and Estee Lauder Cos., the world’s two largest beauty businesses. Beauty is one of the fastest-growing retail product categories, and further consolidation in the space may be expected.