With the acquisition of Avon, Natura &Co becomes the world's...

With the acquisition of Avon, Natura &Co becomes the world’s fourth-largest beauty group. (Photo: Rafapress / shutterstock.com)

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 billion, over 40,000 associates and be present in 100 countries. With this acquisition, Natura &Co becomes the world’s fourth-largest beauty group.

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

Synergies and social media

The company expects the combination to result in synergies estimated at US$150 million to US$250 million annually, “some of which will be reinvested to further enhance capabilities in digital and social selling, research & development and brand initiatives and to continue to grow the Group’s geographic footprint.

"Direct selling was a social network before the word even existed, and the arrival of technology and globalization only multiplied opportunities to connect with consumers in a meaningful way. The peer-to-peer sales model is evolving towards social selling,” said Luiz Seabra, Co-Founder of Natura.

The transition from the traditional model of relationship selling to a more digital scheme should indeed be the key to the success of the operation.

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% of the combined company, while Avon shareholders will own approximately 24%.