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Body Shop owner Natura to buy Avon for £1.6bn | |
(about 7 hours later) | |
Brazilian cosmetics group Natura has announced that it is buying UK-based direct-selling cosmetics business Avon. | Brazilian cosmetics group Natura has announced that it is buying UK-based direct-selling cosmetics business Avon. |
Natura, which already owns The Body Shop and Aesop, is Brazil's top business in cosmetics, perfumes and toiletries. | Natura, which already owns The Body Shop and Aesop, is Brazil's top business in cosmetics, perfumes and toiletries. |
Its all-stock offer of about $2bn (£1.6bn) means Natura shareholders will hold 76% of the combined company, which will have annual revenue of over $10bn. | Its all-stock offer of about $2bn (£1.6bn) means Natura shareholders will hold 76% of the combined company, which will have annual revenue of over $10bn. |
The deal will create the world's fourth-largest cosmetics company. | The deal will create the world's fourth-largest cosmetics company. |
The new combined company will boast 3,200 stores worldwide with a presence in 100 countries. | The new combined company will boast 3,200 stores worldwide with a presence in 100 countries. |
Avon has been struggling to modernise its global business over the last few years, as its door-to-door sales model has become less popular in the internet age. | Avon has been struggling to modernise its global business over the last few years, as its door-to-door sales model has become less popular in the internet age. |
In 2016, the company said it was moving its headquarters from New York to the UK "over time" while cutting 2,500 jobs worldwide as part of a turnaround plan. | In 2016, the company said it was moving its headquarters from New York to the UK "over time" while cutting 2,500 jobs worldwide as part of a turnaround plan. |
At the same time, Avon sold its US operations to investment fund Cerberus. | At the same time, Avon sold its US operations to investment fund Cerberus. |
In April, LG Household & Health Care agreed to acquire both Avon and Cerberus' stakes in the US business. | In April, LG Household & Health Care agreed to acquire both Avon and Cerberus' stakes in the US business. |
According to analysts at Brasil Plural, Natura is "pursuing the goal of becoming a global brand", but warned it would need to significantly invest in Avon's operations in Brazil. | According to analysts at Brasil Plural, Natura is "pursuing the goal of becoming a global brand", but warned it would need to significantly invest in Avon's operations in Brazil. |
Avon already has 2.2 million direct marketing consultants in Brazil. | Avon already has 2.2 million direct marketing consultants in Brazil. |
Natura has a similar business model and many Avon representatives in Brazil also sell Natura products too. | Natura has a similar business model and many Avon representatives in Brazil also sell Natura products too. |
The Brazilian cosmetics maker purchased The Body Shop in a deal believed to be worth 1bn euros ($1.1bn; £880m) from French beauty group L'Oreal in 2017. | The Brazilian cosmetics maker purchased The Body Shop in a deal believed to be worth 1bn euros ($1.1bn; £880m) from French beauty group L'Oreal in 2017. |
Since then, Natura has been trying to turn The Body Shop around, which has suffered from increased competition and a difficult retail environment. | Since then, Natura has been trying to turn The Body Shop around, which has suffered from increased competition and a difficult retail environment. |
L'Oreal bought the business for around €940m in 2006 at the height of its success but it has failed to thrive since. | L'Oreal bought the business for around €940m in 2006 at the height of its success but it has failed to thrive since. |
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