Natura & Co, the owner of The Body Shop and Aesop, has agreed to buy Avon Products in an all-stock deal.
The agreement values the direct-selling company at more than US$2bn and Natura will own 76% of the group, with the remaining owned by Avon’s shareholders.
Confirmed negotiations between the companies have been in the works since March.
The merger will make Natura & Co the fourth largest pure-play beauty group in the world, said the company, and will enable Natura to reach 200 million consumers globally.
Luiz Seabra, co-founder of Natura, described the transactions as 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,” he said.
“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 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.”
Avon has been struggling in recent years and sold off its North American business to private equity company Cerberus in 2016 – which was then sold on again to LG in April 2019.
The UK headquartered company has lost market share to ‘fast beauty’ brands and streamlined direct to consumer launches; as a result, Avon announced in January that it planned to reduce its product offering and to cut its global workforce by 10%.
CEO of Avon, Jan Zijderveld, referred to the acquisition as an “exciting chapter” in Avon’s 130-year history. He said that Natura will help Avon build a stronger e-commerce platform as well as improved data and tools.
He added: “With the support of Natura, we will continue to invest in cutting-edge technology to enhance our digital capabilities and productivity for our representatives.
“Both Avon and Natura are purpose-driven organisations, and the combination will enable us to better serve our millions of representatives, leveraging Avon’s international presence with the same strongly-held commitment to enhancing [the representative's] experience and earnings.”
In 2017 Natura acquired The Body Shop from L'Oréal in an effort to expand its global reach outside of Latin America.