Avon And Natura Confirm Deal Negotiations

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Today, Natura Cosmeticos SA, a Brazilian cosmetics maker and the company that acquired the Body Shop retail chain in 2017, and Avon Products Inc, a beauty products company, said that they were in deal negotiations, however, they offered no details regarding the matter.

A source that has knowledge about the matter said that Natura and Avon have been considering a deal that would put Avon back together three years following the split up of its businesses.

The negotiations have been ongoing for some months. The source, asking for anonymity to discuss private matters, added, that the deal would have Natura acquire the now private North American business of Avon, in addition to the publicly traded Avon that has its headquarters in London.

In a statement that was released earlier today, Avon confirmed the preliminary discussions with Natura regarding a possible deal, however, it gave no further details about the matter. In a securities filing earlier today, Natura also said that the two were in “discussions,” without elaborating further.

After confirming it was holding the negotiations, the company said in the filing: “Natura said it will keep its shareholders and the market in general updated on any new material information concerning a potential transaction involving both companies.”

The source said that Avon is working with Goldman Sachs & Co while Natura is being represented by UBS AG in the negotiation. Both UBS and Goldman did not immediately comment regarding the matter.

In an email that was sent by Avon earlier today, the company declined to comment on the report. A spokesperson for the firm said in the email: “We believe in the turnaround strategy that we have articulated to investors.”

She added: “We are focused on executing our plan and driving long term value for our shareholders.”

The shares of Natura closed down by 7.8 percent on the Sao Paulo stock exchange, at 41.5 reais while the shares of Avon closed up by 10 percent in New York.

Avon sold a majority stake in its underperforming North American business to Cerberus Capital, a private equity company, in 2015, while maintaining a roughly 20 percent interest.