Natura rallies after striking a deal to sell the Avon business in Europe, Africa, and Asia

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Natura Cosmeticos SA (OTCPK:NTCOY [https://seekingalpha.com/symbol/NTCOY]) rallied on Thursday after the Brazilian beauty company announced the sale of its Avon International business that operates in Europe, Africa, and Asia to Regent.

The move is expected to focus on its core brand and products. For investors, removing the financial drag of Avon and its debt is anticipated to allow the company more flexibility to make payments to shareholders in the future. CEO João Paulo Ferreira noted that Natura (OTCPK:NTCOY [https://seekingalpha.com/symbol/NTCOY]) wants to return to being a “high dividend yield” company.

Avon Russia is not included in this agreement and remains classified as "held for sale." The divestiture of Avon International does not affect the company's operations in Latin America, which remain at the core of Natura's (OTCPK:NTCOY [https://seekingalpha.com/symbol/NTCOY]) strategic priorities. The intellectual property rights and the management of the Avon brand in Latin America remain under Natura's (OTCPK:NTCOY [https://seekingalpha.com/symbol/NTCOY]) control.

"This agreement represents the final steps of the simplification journey initiated three years ago focused on the growth of our operations in Latin America. Avon International has already been implementing a robust transformation agenda, and we believe this journey will be strengthened, resuming sustainable growth of this iconic brand that has transformed the global beauty market over the past 139 years," stated Fábio Barbosa, Chairman of Natura's (OTCPK:NTCOY [https://seekingalpha.com/symbol/NTCOY]) Board of Directors.

On September 15, the company announced the sale of Avon's assets in Guatemala, Nicaragua, Panama, Honduras, El Salvador, and the Dominican Republic (Avon CARD) to Grupo PDC.

Shares of Natura (OTCPK:NTCOY [https://seekingalpha.com/symbol/NTCOY]) rallied 13% in São Paulo trading on Thursday.

MORE ON NATURA

* Historical earnings data for Natura [https://seekingalpha.com/symbol/NTCOY/earnings]
* Financial information for Natura [https://seekingalpha.com/symbol/NTCOY/income-statement]