Natura & Co. Mulls Avon Spin-off

Natura & Co. is looking into spinning off Avon International into a separate publicly traded beauty company in order to unlock further shareholder value.

The announcement made Monday by the Brazilian conglomerate fits in with its recent strategy of simplifying its corporate structure and follows the recent divestments of Aesop and The Body Shop.

Natura & Co. off-loaded The Body Shop to Aurelius in a deal valuing the British retailer at 207 million pounds. Prior to that, it sold Aesop to L’Oréal in a deal that valued the personal care brand at $2.5 billion.

The structure of the potential transaction is still being assessed but it is expected that it would result in two separate, stand-alone entities (Natura and Avon), the company said.

Natura would continue to operate with both brands in the region, so the potential separation would not impact the integration of the brands in Latin America. In turn, Avon would indirectly benefit from the sales in Latin America through a commercial arrangement with Natura.

Natura & Co. does not own Avon U.S.

“There can be no assurance that any separation will ultimately be recommended by the board of directors. Completion of a separation would be subject to various conditions, including, among others, final approval from the board of directors and consent from the majority of shareholders,” Natura said in a statement.

“While Natura & Co.’s management conducts the strategic assessment, the company continues to implement Avon’s turnaround strategy and to integrate the businesses of Natura and Avon in Latin America.”