Brazilian cosmetics group Natura &Co Holding SA received board approval on Monday to explore a potential separation between Natura &Co Latam and Avon Products Inc., which would see the establishment of two individual public companies.
Sao Paulo-based Natura stated the plan would split the current business into two listed beauty firms.
Should the deal proceed, sustainability-focused Natura &Co Latam would oversee the global operations of the Natura brand and Avon’s Latin American business.
Meanwhile, American-British Avon would run its own brand outside the region while maintaining ties with Natura &Co Latam in Latin America. The company’s US arm, unowned by Natura, is not included in the arrangement.
The move is also unlikely to affect the firms’ ongoing integration in Latin America.
Further details of the separation are currently being assessed, according to Natura.
Natura’s Corporate Simplification Initiative
The split comes as Natura takes a series of steps to transform its corporate organization into a more simplified structure following the recent sale of its luxury brand Aesop and The Body Shop International Ltd.
Natura said looking into a possible separation aligns with their goal of streamlining their business organization and enabling further autonomy.
The cosmetics maker has, in recent years, been weighed by elevated inflation and the economic repercussions of the conflict between Russia and Ukraine, leading Natura chief executive Fabio Barbosa to opt for the company’s simplification.
Natura sold Aesop to French beauty giant L’Oreal in 2023 in a $2.59 billion deal, while it agreed to sell The Body Shop to German private investor Aurelius Group for £207 million ($259 million).
The firm expects their study of splitting Natura &Co Latam and Avon to help unveil their full potential.
Making Natura &Co Latam and Avon more independent would be beneficial, according to the company, considering they have different geographical footprints and cater to their own beauty consultants and customers.
Avon is expected to gain an advantage indirectly from Latin American sales with its commercial deal with Natura while continuing to run its business in markets outside the region.
