Brazilian cosmetics maker Natura &Co has announced that its board of directors has authorized management to explore the possibility of splitting its Avon brand outside of Latin America, potentially creating a new listed firm to oversee the business in regions beyond Latin America. The details of the split are still being evaluated, but this move aligns with Natura’s efforts to simplify its corporate structure, following the divestment of its Aesop and The Body Shop brands in the past year.
According to a securities filing, the potential deal would result in the separation of the current company into two listed parts. Natura &Co Latam would operate the Natura brand globally and the Avon brand exclusively within Latin America. Meanwhile, Avon would operate independently outside of Latin America while collaborating with Natura &Co Latam within the region. It’s important to note that Avon’s U.S. business, which was never under Natura’s ownership, is not included in this deal.
Natura stated that this split aligns with its strategy of simplifying its corporate structure and granting its business units greater autonomy. The company believes that the move will not disrupt the ongoing integration of the Natura and Avon brands within Latin America. Instead, granting more autonomy to each brand could benefit them, given their distinct geographies and customer bases.
Natura has faced challenges in recent years due to high inflation and the economic effects of Russia’s war on Ukraine. In response, CEO Fabio Barbosa initiated a streamlining process for the company. As part of this effort, Natura sold its luxury brand Aesop to L’Oreal for $2.59 billion and The Body Shop to private investor Aurelius Group for 207 million British pounds ($259 million).
While Natura has not provided specific details regarding the potential listing locations for the separated companies, the company’s shares are currently listed on the Sao Paulo stock exchange. Additionally, Natura recently announced its plans to delist its American Depositary Shares from the New York Stock Exchange.
