LONDON, Jan. 8, 2019 /PRNewswire/ -- Avon Products, Inc.
(NYSE: AVP) ("the Company"), a globally recognised leader in direct
selling of beauty and related products, today announced it has
entered into a definitive agreement with TheFaceshop Co., Ltd., a
subsidiary of LG Household & Health Care Ltd., one of
Asia's largest consumer goods and
beauty companies, under which TheFaceShop will acquire all of the
shares of Avon's Beauty manufacturing operation in Guangzhou, China. Net proceeds to Avon will be $44
million.
The companies also agreed to enter into a manufacturing and
supply agreement, under which the Guangzhou factory will manufacture products
for Avon's fast-growing Chinese
business and other markets, while maximizing the capacity of the
plant for its own production. Avon's associates at the facility will remain
with the operation.
These agreements are another step in Avon's strategic shift to opening up its
business mindset with best in class partners to efficiently
manufacture and deliver products, in service of the millions of
beauty entrepreneurs and their customers around the world.
Jan Zijderveld, CEO of
Avon, said, "This transaction is a
significant step forward in our efforts to 'Open Up Avon' by
operating more efficiently, with a leaner, more agile global
infrastructure. This agreement provides us with greater operational
and financial flexibility, while allowing us to benefit from the
local knowledge, world-class products, R&D expertise and
infrastructure of internationally-recognized partners such as LG
H&H. By operating with a local structure that fits our purpose,
we will be better positioned to capture the significant opportunity
in China and the wider Asian
market. We know LG H&H well and believe that they will continue
to be a strong partner for Avon as
we collectively seek to grow our business in the region."
Suk Cha, CEO of LG Household
& Health Care, said, "We are pleased to have reached this
agreement with Avon and add a
state-of-the-art facility with powerful capabilities to deliver
quality products for the fast-growth local market. Our past
interactions with Avon provide us
a sound understanding of its brand power and global reach, and we
look forward to continuing our relationship with Avon as we both explore ways to grow our
product lines, bring desirable products to market faster, and each
accelerate our growth across Asia."
The transaction is expected to close by February 2019 following customary local
regulatory approvals.
About Avon Products, Inc.
Avon is the Company that for 130 years has
proudly stood for beauty, innovation, optimism and, above all, for
women. Avon products include
well-recognised and beloved brands such as ANEW, Avon Color, Avon
Care, Skin-So-Soft, and Advance Techniques sold through
approximately 6 million active independent Avon Sales
Representatives. Learn more about Avon and its products at
www.avoncompany.com.
About LG Household & Health Care Ltd.
LG
Household & Health Care (LG H&H) is the #1 consumer goods
company in Korea, with leading positions in all major categories
including cosmetics, personal care, home care and beverages.
The company is listed on the Korea Stock Exchange with a market
capitalization of USD 18 billion as
of December 1, 2018 and full-year
revenue is approximately USD 6
billion (based on Bloomberg Estimates). In recent years, LG
H&H has accelerated expansion beyond Korea, with leading luxury
cosmetics brands such as 'The history of Whoo', 'su:m' and 'belif',
and is now within the top 10 global cosmetics companies in
Asia.
Forward-Looking Statements
This press
release contains "forward-looking statements" that are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including statements relating to the
Company's strategy and future growth in Asia. Because
forward-looking statements inherently involve risks and
uncertainties, actual future results may differ materially from
those expressed or implied by such forward-looking
statements. These risks and uncertainties include, but are
not limited to, the possibility of business disruption, competitive
uncertainties, and general economic and business conditions in
Avon's markets as well as the
other risks detailed in Avon's
filings with the Securities and Exchange Commission. Avon undertakes no obligation to update any
statements in this press release for changes that happen after the
date of this release.
Contacts
Avon Products Inc.
INVESTORS:
Amy Greene
Vice President, Investor Relations, Avon Products, Inc.
(US) 914-935-2172
amy.greene@avon.com
MEDIA:
Chris Wermann
Group Vice President and Chief Communications Officer, Avon
Products, Inc.
(UK) + 44(0) 7867185442
Chris.Wermann@avon.com
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SOURCE Avon Products, Inc.