Natura shares surge after deal to sell Avon businesses outside Latin America

Core Viewpoint - Brazilian cosmetics maker Natura has agreed to sell its Avon International unit to Regent, marking the end of uncertainty regarding this business segment and resulting in a more than 13% increase in Natura's shares traded in Sao Paulo [1]. Group 1: Strategic Moves - Natura is executing divestitures to simplify its structure, integrate business units, and focus on the Latin American market after facing profitability challenges in recent years [2]. - The company has previously divested brands such as Aesop and The Body Shop, and recently announced a deal to sell Avon's businesses in Central America to Grupo PDC [2]. Group 2: Details of the Sale - The sale of Avon International includes operations in Europe, Africa, and Asia, but excludes Avon's Russian business, which is still "held for sale," and its Latin American operations, which are central to Natura's strategy [3]. - The U.S. business of Avon, which was never owned by Natura, is also not included in this transaction [3]. Group 3: Financial Implications - Natura will receive a nominal consideration of 1.00 pound ($1.36) at closing, with contingent payments based on future results and certain liquidity events capped at 60 million pounds [4]. - Analysts at Santander noted that this move should alleviate concerns regarding the need for additional cash injections to sustain Avon's operations, as Avon International has been a cash-burning unit [4].