Should Natura Reunite Avon?

When Avon Products Inc. spun off the struggling North America business in 2016, it was shedding a problem. The deal was meant to allow the business to focus on international markets, while handing over the North America project to private equity firm Cerberus Capital Management, which bought an 80 percent stake in that company. Since the deal, both parts of Avon have continued to struggle. Now, with Brazilian direct-seller Natura in preliminary talks to buy both businesses, they could come back together. It’s something industry sources expressed skepticism about on behalf of Natura, noting that the Brazilian company is still working to turn around its 2017 acquisition of The Body Shop. But sources said that the deal could potentially have synergies for a reunited Avon. “You’d expect some synergies in bringing them back together, even in overhead, R&D,” said Coye Nokes, partner at OC&C Strategy Consultants. “It’s quite a tall order to ask them to integrate, plus turn around. If you think about the number of items on the to-do list, that’s a lot.” Another source suspected there were few synergies to be had. “If you’re the [international business], why would you want a weight around your ankle, weighing you down?” the source said. Both sides

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