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Natura and Avon announce US$10 billion merger

Brazilian parent of Aesop and the Body Shop to take over 130-year-old Avon business.

Cosmetics firm Natura is acquiring Avon Products in an all-share transaction, creating one of the world’s largest “pure-play” beauty groups.

The combination of Natura and Avon will create as a multi-brand and multi-channel beauty group with direct connections to consumers on a daily basis. Going forward, the group will hold a strengthened hand in relationship selling through Avon’s and Natura’s more than 6.3 million consultants and representatives; a global footprint through 3200 stores, as well as an expanded digital presence across all companies.

The combined group is expected to have annual gross revenues of more than US$10 billion, more than 40,000 associates, and a presence in 100 countries.

“We have always looked at Avon with respect and admiration,” said Natura cofounder Luiz Seabra. “Natura was founded on its passion for beauty and relationships, and today’s transaction creates a major force in the direct-to-consumer space. Direct selling was a social network before the word even existed, and the arrival of technology and globalisation only multiplied opportunities to connect with consumers in a meaningful way.

“The peer-to-peer sales model is evolving towards social selling and the power of digital allows the group to go beyond providing products and advice, and advances women’s empowerment, through financial independence and enhanced self-esteem. We believe that business can be a force for good and together with Avon, we will amplify our pioneering efforts to bring social, environmental and economic value to an ever-expanding network,” said Seabra.

Avon and Natura both reach customers through a force of independent, primarily female micro-entrepreneurs, who act as brand ambassadors and beauty advisors.

Natura expects the combination to result in target synergies estimated at $150 million to $250 million annually, some of which will be reinvested to further enhance capabilities in digital and social selling, research and development and brand initiatives and to continue to grow the group’s geographic footprint.

“Following the acquisitions of Aesop in 2013 and The Body Shop in 2017, Natura is taking another exciting, decisive step to build a global, multi-brand, multi-channel, purpose-driven group,” said Natura executive chairman Roberto Marques. “Together we will enhance our growing digital capabilities, our social network of consultants and representatives and leverage our global store footprint and distinctive brands, connecting, touching and influencing millions of consumers with different profiles daily, making our group unique and creating a formidable platform for growth.”

“This combination is the start of an exciting new chapter in Avon’s 130-year history,” said Avon CEO Jan Zijderveld. “It stands as a testament to the progress of our efforts to ‘Open Up Avon’, and we believe it will allow us to significantly accelerate our strategy and further expand into the online channel. Over the past year, we have started a transformation to strengthen Avon’s competitiveness by renewing our focus on Her, simplifying our operations, and modernising and digitising our brand. Together with Natura, we will have broader access to innovation and a portfolio of products, a stronger e-commerce and digital platform, and improved data and tools for representatives to drive growth and enhance value for shareholders.”

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