Cerberus taking a majority stake in Avon N. American unit

NEW YORK -- Private investment firm Cerberus Capital Management is taking a majority stake in Avon's North American division.

The companies said that they believe the partnership will help to improve Avon's performance and boost shareholder value.

See Full Article

Cerberus will get an 80.1 per cent interest in Avon North America in exchange for a $170 million equity investment. The North American unit will be separated from Avon Products Inc. into a privately-held company that will include the U.S., Canada and Puerto Rico. It will be managed by New York-based Cerberus.

The new company will enter into a licensing agreement with Avon for the use of the Avon brand, the Avon product portfolio and other intellectual property. There will also be a transition services agreement to include IT and research and development.

Pablo Munoz, current president of Avon North America, will leave the company, effective January 4. Cerberus will name a new CEO for the business.

Cerberus will also make a $435 million investment for a minority stake in Avon Products Inc.

Avon CEO Sheri McCoy said in a written statement that the New York-based company will focus resources on its top markets, adding that the investment from Cerberus will give it the financial flexibility needed to implement plans for its international business.

Avon's board has approved the deal, which is expected to be completed in the spring. Avon will trim its board from 12 to 11 members.

The beauty products company also announced that it is suspending its quarterly dividend, starting in 2016's first quarter.

Avon shares jumped 30 cents, or 7.4 per cent, to $4.39 in morning trading Thursday. Avon Products shares have fallen more than 50 per cent so far this year.



Advertisements

Latest Economic News

  • Tesla swings to lost in 4Q, says Model 3 on target

    Economic CTV News
    DETROIT -- Unable to string together profitable quarters, electric car and solar cell maker Tesla Inc. reported a loss for the last three months of 2016. Tesla posted its first profit in three years in last year's third quarter and had predicted net income in the fourth quarter. Source
  • Tesla swings to loss in 4Q, says Model 3 on target

    Economic CTV News
    DETROIT -- Unable to string together profitable quarters, electric car and solar cell maker Tesla Inc. reported a loss for the last three months of 2016. Tesla posted its first profit in three years in last year's third quarter and had predicted net income in the fourth quarter. Source
  • United Airlines enters basic economy fare wars in the U.S.

    Economic CTV News
    On Tuesday, United began selling basic economy fare tickets on select domestic routes in the U.S., joining American Airlines and Delta in offering a budget option for fliers. It's a move aimed at staying competitive in a market that's becoming increasingly crowded with low-cost and ultra-low cost carriers. Source
  • SodaStream recalls bottles at risk of bursting

    Economic CBC News
    SodaStream Canada has recalled some one-litre bottles because consumers could be injured if the bottles rupture while the contents are being carbonated. The recall was issued jointly by Health Canada, the United States Consumer Product Safety Commission and SodaStream Canada Ltd. Source
  • Good news for Bombardier? Business jet sales may be bolstered by Trump tax cuts

    Economic CTV News
    MONTREAL -- The U.S. government's plan to cut corporate taxes will bolster the business jet industry which last year had its weakest performance since 2004, an association representing the sector said Wednesday. "It will be a good shot in the arm for the industry," said Pete Bunce, CEO of the General Aviation Manufacturers Association. Source
  • Tim Horton's parent buys Popeyes chicken

    Economic CTV News
    Restaurant Brands International, the parent company of Burger King and Canada's Tim Hortons donut shops, said Tuesday it has reached a deal to buy American fried chicken chain Popeyes Louisiana Kitchen. The sale price is US$1.8 billion, or US$79 per share, according to a statement, representing a 27 percent premium over Popeyes' recent average stock price. Source
  • Apple acquires facial recognition start-up

    Economic CTV News
    RealFace specializes in developing artificial intelligence (AI) based facial recognition software. Its first consumer application, Pickeez, can find all the photos of a given person on a smartphone or in a Facebook folder and can even pick the best shots. Source
  • TransCanada asks shippers to support new natural gas pipeline tolls

    Economic CTV News
    CALGARY -- TransCanada (TSX:TRP) is proposing a new pipeline tolling system it says will allow western Canadian natural gas to be shipped to Ontario at lower rates to better compete with growing American supplies. The Calgary-based energy transport company is inviting shippers to sign long-term binding commitments by March 9 to move gas on its underutilized Canadian Mainline system from a shipping centre in Alberta to a hub in southern Ontario. Source
  • Saputo poised to gain full control of Australia's Warrnambool dairy

    Economic CTV News
    MONTREAL -- Canadian dairy giant Saputo Inc. is poised to gain full ownership of Warrnambool Cheese and Butter Factory Co. after Lion Dairy and Drinks accepted a sweetened offer to sell its minority stake in the Australian cheese and dairy producer. Source
  • SodaStream recalls thousands of bottles due to danger they could rupture

    Economic CTV News
    OTTAWA - SodaStream is recalling thousands of its bottles in Canada and the U.S. because of a danger they may rupture when a user is in the process of carbonating water. The maker of water carbonation machines said it was voluntarily recalling the bottles due to a manufacturing defect. Source