By Newsfeed

RIO DE JANEIRO, BRAZIL – The Brazilian cosmetics maker Natura announced yesterday that it is buying Avon Products in an all-stock deal that is valued at $3.7 billion, in a move that would create the world’s fourth-largest group of beauty products.

Shareholders of both companies would have to approve the deal. As part of this transaction, a new Brazilian holding company, Natura Holding S.A., has been created.

Natura & Co’s shareholders will own approximately 76 percent of the combined company, while Avon shareholders will own roughly 24 percent.

The merger creates a group with leading positions in relationship selling through Avon’s and Natura’s over 6.3 million consultants and representatives, a global footprint through 3,200 stores, as well as an expanded digital presence across all companies.

The combined Group is expected to have annual gross revenues of over US$10 (R$ 41) billion, with over 40,000 associates, and will be present in 100 countries.

Natura & Co’s portfolio includes the brands Natura, The Body Shop, and Aesop. The addition of Avon should enhance the group’s ability to serve its different consumer profiles and distribution channels better and expand into new geographies.

Founded in 1969 in the small town of Cajamar, outside São Paulo, Natura said the purchase of the American rival fits within its objective of building a brand with global reach.

The Brazilian company started with a door-to-door model similar to Avon’s, but recently bought retail stores like The Body Shop.

A couple of days ago the brand controversially launched a campaign to advertise the new line of lipsticks, Collection of Love, which caused hundreds of internet users in Brazil to promote the hashtag #IboycottNatura calling for a boycott of Natura products.

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