RIO DE JANEIRO, BRAZIL – Natura disclosed on Saturday, October 12th, further details about the process in which the recently founded holding Natura&Co will house its current cosmetic operations as well as the operations that will be aggregated after the American Avon acquisition. This process is expected to cost US$349 million (R$1.4 billion), including assessments, publications, legal advisors and other advisors, according to the group’s press release.
“The corporate restructuring is timely so that Natura Cosméticos becomes a Natura&Co holding, enabling the subsequent integration of the shareholder base and Avon operations, without this resulting in an increase of the Natura’s indebtedness index”, said the company.
The business partnership is expected to give rise to the fourth-largest global beauty group sector, with annual turnover in excess of US$10 billion. The Avon acquisition agreement – which excludes only the Japan and USA operations – was originally announced in May this year.
This is a further step in the Brazilian company’s international strategy, after having bought the Australian company Aesop, in 2012, and the British company The Body Shop, four years later. With Avon, the company will be present in different market niches.
Step by step
The business combination process into the holding Natura&Co will be divided into four steps, the first two focused on the restructuring and integration of Natura Cosméticos, and the last two to the introduction of Avon.
On the first step, Natura Cosméticos controlling stockholders (owners of a 57,22 percent stake in the company) will take part of a Natura&Co capital increase with a transfer of its stocks and an amount of money to be used to pay for income tax by Natura&Co.
Step two will include the incorporation by Natura&Co of all other Natura Cosméticos stocks for its respective book asset value. As a result, Natura Cosméticos will become a wholly-owned subsidiary of Natura&Co. Natura Cosméticos shareholder will be granted a Natura&Co stock for each detained share.
Still according to the press release, in an operation that will consist of three distinct stages, Avon will also be incorporated into Natura&Co.
On the communicate, Natura reported that the companies are unaware of “significant risks” resulting from the business combination proceeding. In addition, the company recalled that the integration efficacy is conditioned upon the concurrence of the stockholders in general meetings, as well as the green light of the Brazilian and foreign competition authorities.
Source: Estadão Conteúdo