Natura & Co., a Brazilian beauty conglomerate, announced on Monday that it is exploring the possibility of splitting its Natura and Avon businesses into two separate publicly traded companies. The motive behind this potential split is to unlock further value for the company's shareholders.
Under this proposed plan, both Natura and Avon would operate with unique business strategies, independent governance, and dedicated management teams. This would enable each company to pursue more tailored approaches aimed at driving long-term value for their respective shareholders.
Natura, known for its commitment to sustainability, would focus on promoting environmental consciousness and would have the rights to operate the Natura brand worldwide, as well as the Avon brand in Latin America. On the other hand, Avon would possess exclusive ownership of the Avon brand, positioning itself as a geographically diverse business with a strong emphasis on empowering women.
It's worth noting that the two companies cater to different beauty consultants and consumers across distinct geographical locations. This separation aligns with Natura & Co.'s strategy of streamlining its corporate structure while granting greater autonomy to its individual business units.
This potential split follows Natura & Co.'s recent divestment of Aesop to L'Oreal SA and The Body Shop to a private-equity firm. It reflects the company's commitment to strategic simplification and focusing on core operations.
In line with these developments, Natura also revealed its plan to end its secondary listing of American depositary receipts (ADRs) on the New York Stock Exchange. The primary listing will remain on the Sao Paulo stock exchange, where the majority of trading activity is concentrated.
Following the announcement of a possible separation between Natura and Avon, Natura's ADRs experienced a 2% increase in extended trading after closing the regular trading day with a 0.2% decline.