Year: 2020

Winner: Natura &Co acquisition of Avon Products

The acquisition of cosmetics giant Avon by Brazil’s Natura &Co created the world’s fourth largest pure beauty group.

It was also an unusual transaction where a company listed in a Latin American exchange purchased a New York-listed rival in a stock for stock transaction.

Nobody should be surprised, therefore, by the fact that Natura &Co is the recipient of the Corporate Cross-Border M&A of the Year award granted by LatinFinance.

The acquisition of Avon was a bold step that consolidated Natura &Co as one of the global heavy hitters in the cosmetics market, after the acquisitions of Australia’s Aesop, in 2013, and British brand The Body Shop, in 2017.

The new, combined company boasts annual revenue of more than $10 bln and almost 7 million sales representatives in over 100 countries. According to Investor Relations Officer Viviane Behar, the operation will generate synergy gains between $300 mln-400 mln a year after the integration process is completed in 2024.

“It has strengthened our positions in markets where we already were, and gave us the opportunity to expand into new markets,” she said.

The deal, which was officially closed in January 2020, was complex. In order to make it possible to exchange Avon’s stock for its own equity, the Brazilian group had to create a new holding company, which issued equity both at the B3, in São Paulo, and in the US, via ADRs sold on the New York Exchange.

Avon’s shareholders received Natura &Co ADRs on a ratio of 0.6 to each Avon share. The company avoided the need to borrow money to fund the acquisition, Behar pointed out. She believes that it was the first case where a company listed in Brazil bought a company listed in NY with a stock for stock deal. “The deal reflected very well on the trust that investors have on Brazil’s capital market institutions,” she said.

Avon brought some debt into its new home though. For that reason, in October, Natura &Co performed a follow-on issuance to raise $1 bln and pay it off. The goal of the company was to replace Avon’s debt for new one that is better suited to the company’s goals in terms of currency profile and interest rates.

“It shows the confidence of the market with the acquisition of Avon,” Behar said. “Our balance sheet is now much stronger, and our debt levels are low compared to our peers.”- LF

SPONSOR: Natura &Co

BANKS: Goldman Sachs, Morgan Stanley, PJT Partners, UBS, Bank of America

LAW FIRMS: Baker McKenzie; Cravath Swaine & Moore; Davis Polk & Wardwell; Mattos Filho; Paul Weiss; Pinheiro Neto Advogados; Tudisco, Rodrigues & Junqueira; Sullivan & Cromwell; Trench Rossi Watanabe

All supporting financial institutions and law firms were transmitted to LatinFinance by the award category winners. For updates please email