Brazilian Natura Cosmeticos could agree to purchase American Avon, which is widely known for the successful direct sales of the cosmetics produced.
In its report Natura said that they would pay for the transaction in the company’s shares: 0.3 Natura shares for 1 share of Avon. This means that Avon is estimated at $ 2 billion.
The deal is expected to be closed in early 2020. After the purchase, Avon shareholders will receive a 24% stake. In addition, they will take 3 from 13 seats in the Board of Directors.
The talks about buying Avon began last fall. The company began to lose its customers due to the change in habits and tastes. A growing number of consumers prefer to buy cosmetics through the Internet.
The future deal will put an end to the entire era, during which many people got a chance to do business. Avon became the pioneer in the marketing of the XX century. A huge number of projects of such a plan were built in its image.
Natura is the largest manufacturer of cosmetics in Brazil with its own sales network. The company’s products are very popular in Latin America, as well as in France. In 2017, the company bought the Body Shop retailer. The acquisition of Avon will give Brazilians the opportunity to increase the trade and present their products in the European and Asian markets.
Natura was founded in 1969. Its capitalization currently amounts to $ 6.6 billion. After the announcement of the deal, the company’s securities grew by 9.4%.
Avon shares rose by 9% on Wednesday. During the preliminary session on Thursday, they are growing by 15%.
The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade