PCC approves The Body Shop acquisition of Avon

ANTI-TRUST watchdog Philippine Competition Commission (PCC) has approved the acquisition by Natura Cosméticos S.A. (Natura) of Avon Products Inc. (Avon), marking the merger of two of the world’s popular beauty and personal care brands with presence and following in the Philippines.

Natura, parent firm of The Body Shop, is a global personal care cosmetics group headquartered in São Paulo, Brazil while Avon is a direct selling company in beauty, household, and personal care categories with home base stationed in New York, US.

In a ruling issued on September 12, the commission said the takeover by Natura of Avon 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.

The merger review noted there is minimal substitution between the beauty products of Natura and Avon because both parties cater to different consumer segments with significant price differences.

The PCC also noted the parties have different modalities for distribution of their products and manifested to the commission 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 and reported to maintain its direct selling business model. On the other hand, Body Shop reported it will also continue its business modality as a specialty store.

The transaction will not likely result in any substantial change in the market structure. Given the numerous beauty and personal care companies in the market, sufficient competitive constraints remain after the transaction, according to the PCC.

As a result of a corporate restructuring arising from the transaction, Natura shareholders stand to gain approximately 76 percent of the interests, while the Avon shareholders will hold approximately have 24 percent of the interests in its new holdings company, Natura & Co. (From PR/SunStar Philippines)


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