SAO PAULO (Reuters) – Brazilian cosmetics maker Natura &Co is in exclusive talks with asset manager IG4 for the potential sale of Avon’s operations outside Latin America, it said on Thursday, sending its shares higher.
Natura said in December it had resumed studies on what to do with its Avon business outside the region, including a possible sale, partnerships or a spinoff.
Natura first disclosed in early 2024 it was mulling its options, but the plans were briefly halted last year after its Avon Products (API) unit, a U.S.-based non-operating holding, filed for Chapter 11 bankruptcy protection.
Natura noted the negotiations with IG4 were still at an early stage, adding that it continues to evaluate other strategic alternatives.
Sao Paulo-traded shares of Natura &Co rose around 3.5% on the news, making it one of the biggest gainers on the benchmark Bovespa stock index, which was roughly flat.
“This is a pivotal piece on our investment thesis that banks on business simplification,” JPMorgan analysts said in a note to clients.
“Our base thesis is that Natura should sell/divest from Avon Intl in the short term, following the successful API chapter 11 process, and bring to surface a strong free cash flow from LatAm, unlocking more dividends.”
(Reporting by Gabriel Araujo; Editing by Emelia Sithole-Matarise)
