Natura to sell Avon's Central America business; shares rise

Core Viewpoint - Natura is simplifying its operations by selling Avon's businesses in several Central American countries to Grupo PDC for $1, as part of a broader organizational restructuring effort [1][2]. Group 1: Transaction Details - The deal includes Avon's operations in Guatemala, Nicaragua, Panama, Honduras, El Salvador, and the Dominican Republic, collectively referred to as Avon CARD [1]. - An additional payment of $22 million is expected upon closing, which is a receivable from Avon Guatemala to Natura's subsidiary in Mexico [3]. - Natura will continue to supply finished goods to Avon CARD and will act as the licensor of the Avon brand in the region [3]. Group 2: Financial Impact and Market Reaction - Following the announcement of the Avon CARD deal, Natura's shares rose over 3%, outperforming the Bovespa index, which increased by 1.1% [2]. - Analysts estimate that the sale of Avon CARD could result in savings of approximately 60 million reais ($11.28 million) for the company [5]. Group 3: Strategic Alternatives - Natura is exploring strategic alternatives for the Avon International unit, which includes its Avon businesses outside Latin America, recently classified as an asset "held for sale" [4]. - The businesses in the Dominican Republic and Central America were also reclassified under this label in August [4]. - Analysts believe that the Avon CARD deal may enhance sentiment towards Natura's efforts to sell Avon International [4].