Natura announced this afternoon the acquisition of Avon Products, Inc. (NYSE: AVP) in a stock exchange operation, creating the fourth largest exclusive beauty group in the world. A new holding company for the group, Natura Holding SA (“Natura & Co” or “Natura Holding“), will be the holder of all the shares of Natura and Avon, as a result of a corporate restructuring to be implemented in the context of the transaction .

The combination creates a multi-brand and multichannel group, leader in the direct relationship with its consumers, through the more than 6.3 million Avon and Natura Representatives and Consultants, a global geographic presence with 3,200 stores, and one growing digital strength. With Avon, Natura & Co will have annual gross sales of over US $ 10 billion, more than 40 thousand employees and presence in one hundred countries.

Earlier Wednesday morning, the company had issued a statement confirming that it was negotiating the purchase of the North American rival, however, the company considered that there was no way to guarantee the conclusion of the transaction. “The parties are currently negotiating the final contractual terms and conditions of the Transaction,” Natura said in the statement to the market. Avon, following Natura’s message, also sent out a statement stating that “there is no guarantee that a transaction would be completed from the negotiations.”

The statement was sent in reason of the publication by the Financial Times newspaper, online edition, and reproduced by other media outlets that Natura will buy Avon in an all-stock agreement that evaluates the North American group in more than 2 billion of dollars.

The inclusion of Avon in a portfolio that already has Natura, The Body Shop and Aesop expands Natura & Co’s ability to serve different customer profiles in various distribution channels, expanding its operations to new regions. These brands will reach more than 200 million consumers around the world through consultants and representatives, retail stores, digital platforms and e-commerce.

Natura & Co expects the combination of these businesses to result in estimated synergies between US$ 150 million and US$ 250 million per annum that will be partially reinvested to further increase its presence in digital channels and social media, R & D, brand initiatives and expansion of group´s geographical presence.

“We always look at Avon with respect and admiration. Natura was born of a passion for beauty and relationships. Today’s union creates an important force in the segment. Direct selling was already a social network even before the word existed, and the advent of technology and globalization only multiplied opportunities to connect with consumers significantly. The business model is evolving into relationship selling and the power of the digital age allows the group to go beyond providing products and consulting, expanding women’s empowerment through financial independence and increased self-esteem. We believe that business can be a force for good and, with Avon, we will expand our pioneering efforts to bring social, environmental and economic value to an ever expanding network, “said Luiz Seabra, co-founder of Natura.

According to Roberto Marques, CEO of Natura & Co, “after the acquisition of Aesop in 2013 and The Body Shop in 2017, Natura & Co is taking a decisive step towards building a multi-brand, multichannel, purpose-driven global group. Avon is an incredible company, an iconic brand with dedicated employees and more than five million Representatives who also believe in the power of relationships. Together, we will enhance our growing digital capabilities, our social network of Consultants and Representatives and leverage our global presence of differentiated stores and brands, connecting and influencing millions of consumers with different profiles daily, making our group unique with a formidable platform for growth. ”

“Both Avon and Natura are purpose-driven organizations, and the combination will enable us to better serve our millions of representatives by leveraging Avon’s international presence with the same strong commitment to improving Reseller’s experience and revenue,” said Jan Zijderveld , CEO of Avon.