Avon North America will soon have a new owner -- LG Household & Health Care.
LG H&H has announced it has entered into a definitive agreement with Avon Products and an affiliate of Cerberus Capital Management to acquire New Avon, LLC for $125 million in cash.
LG H&H will acquire the entirety of Cerberus' majority interest and Avon Worldwide's minority interest in Avon North America. The transaction has been approved by the LG H&H Board of Directors.
LG H&H is Korea's leading consumer goods company, with strong market positions in all major categories including cosmetics, personal care and home care.
The addition of Avon's iconic brand, award-winning products, dedicated employee base and network of 250,000 sales representatives throughout North America will support LG H&H's international growth plans.
Under the company's ownership, Avon North America will continue its strategy of product innovation, while strengthening its position as the leading social selling beauty company in the region. Avon North America is expected to benefit from LG H&H's world-class R&D capabilities in cosmetics, personal care, fragrance, packaging and design.
Suk Cha, CEO of LG Household & Health Care, said, "We recognize Avon North America's strong brand, leading market position in the region, and talented employees and Representatives. Avon North America's innovative social selling model builds deep connections with customers and we are excited to leverage this as we continue to expand. We look forward to building on Avon North America's success to drive customer engagement and long-term growth in this market."
Laurie Ann Goldman, CEO of Avon North America, comments, "LG H&H respects and admires our strong community of Representatives, and supports our mission to empower women through economic opportunity. We are thrilled to welcome our new partner, who shares our commitment to innovation, and our clear focus on putting customers first. We have appreciated our partnership with Cerberus over the last three years and their support as we strengthened the company and reset our path toward long-term success."
The transaction is expected to close on September 30, 2019 and is subject to certain customary closing conditions, including regulatory approvals in the U.S.
A Comment from Avon Worldwide's CEO, Jan Zijderveld
In a separate press statement, Jan Zijderveld, CEO of Avon Worldwide, comments, "We have built a strong relationship with LG H&H and know them to be a great partner. We believe this transaction is a testament to LG's belief in the strength of Avon's brand and business model, and are excited to see the progress that Avon North America makes as part of LG H&H."
Zijderveld continues, "At Avon Worldwide, we remain focused on executing our strategy to 'Open Up Avon.' We are operating with urgency as we renew our focus on our Representatives, reboot direct selling, simplify our operations and digitise the business. We are seeing signs that our efforts are taking hold and are confident that we are on the right path to returning to growth and driving value for our shareholders."
A Final Statement
Avon Worldwide says the transaction between the separate Avon North America business and LG H&H has no impact on Avon Worldwide's current operations or strategy.
Further, this transaction is unrelated to Avon Worldwide's previously announced sale of its beauty manufacturing operation in Guangzhou, China to a subsidiary of LG H&H, and the subsequent manufacturing and supply agreement, which was completed in February, 2019.