Coty Announces Proposal to Acquire Avon Products
Coty Inc., a global beauty company, announced that it has submitted a non-binding proposal to acquire Avon Products, Inc. for $23.25 per share in cash in a mutually agreeable and negotiated transaction. The proposal, valued at approximately $10 billion, represents a very substantial premium of 27% over the three month volume-weighted average price for Avon shares. Coty has held extensive discussions with its financing sources about obtaining the debt and equity financing necessary to complete this transaction, and is confident that such financing will be available.
Following extensive but unsuccessful attempts to engage Avon in discussions regarding its proposal, Coty has decided to make its proposal public in order to inform Avon’s shareholders of the significant value in a transaction. Coty said it has no intention of pursuing an acquisition on a hostile basis.
“Our objective is to engage in discussions with Avon and conduct due diligence so that we and Avon can together determine if there is a basis for a transaction. We believe Avon’s shareholders would want their Board to explore with us the benefits to shareholders of a transaction,” said Bart Becht, chairman of the Board of Directors of Coty.
BDT & Company is arranging equity financing from the Joh. A Benckiser companies and BDT Capital Partners along with selected Limited Partners in the BDT Capital Funds. J.P. Morgan Securities is arranging the debt financing.
Coty has committed to reinvesting a material part of the cost synergies of the combination to address Avon’s operational issues and drive future growth.
Coty is a leader in beauty with $4.5 billion in net annual revenues. Its products are sold through traditional retail as well as prestige distribution channels.
The combination would create a new strong company in Beauty to be called “Avon- Coty.” It will be focused on providing consumers and account representatives innovative, quality and branded beauty products across distribution channels.