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PCC approves The Body Shop owner’s acquisition of Avon


The Philippine Competition Commission (PCC) has approved the acquisition of US-based Avon Products Inc. by Brazilian Natura Cosméticos S.A.—the company behind The Body Shop.

In a September 12 decision, the PCC noted the takeover of Avon by Natura “does not result in substantial lessening of competition in the beauty and personal care products market mainly because Natura and Avon do not compete in the same market.”

New York, USA-based Avon Products is a direct-selling company in beauty, household, and personal care products.

On the other hand, the Natura Group is a global personal care cosmetics company based in São Paulo, Brazil. It comprises Natura Cosméticos, Aesop, and The Body Shop.

“The merger review noted there is minimal substitution between the beauty products of Natura and Avon because both parties cater to different consumer segments,” the PCC said.

Because of the different target markets, the beauty products on their respective racks also have significant price differences, the commission noted.

Both companies have different modes of distribution, manifesting before the commission that they will retain their current distribution business models after the buyout.

Avon popularized the door-to-door cosmetic sales through its “Avon ladies” distribution line. It intends to maintain its direct selling business model after the acquisition deal is consummated

The Body Shop reported it will also continue doing business as a specialty store—its business model.

“The merger review also looked into what consumers considered as the Body Shop’s list of competitors, such as Lush, InnisFree, and Kiehl’s, among others; while Avon was found to compete more with Ever Bilena, Maybelline, Unilever, and P&G,” the PCC said.

The transaction will not likely result in any substantial change in market structure, it said.

“Given the numerous beauty and personal care companies in the market, sufficient competitive constraints remain after the transaction,” the commission noted.

As a result of a corporate restructuring arising from the transaction, PCC noted a new holding company for the group, Natura Holding S.A. (Natura &Co.), will wholly own both shares of Natura and Avon.

Natura shareholders stand to gain approximately 76.0% of the equity interests in Natura & Co., while the Avon shareholders will hold approximately 24.0% of the interests in the holding company.

Natura & Co.’s shares will be listed on the Novo Mercado segment of “B3” S.A.—Brasil, Bolsa, Balcão in São Paulo, Brazil.

On the other hand, Natura & Co will also have American depositary shares to be listed on the New York Stock Exchange.

The antitrust body is mandated by the Philippine Competition Act to review mergers, acquisitions and joint ventures of firms across all sectors, including global deals with business presence in the Philippines, which meet the P2-billion threshold to ensure the deals will not harm the interest of consumers.

The commission has so far approved 182 out of the 196 filed transactions, with a combined value of P3.21 trillion. —Ted Cordero/VDS, GMA News

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