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

  • Kinder Morgan announces final investment decision on Trans Mountain pipeline

    Economic CTV News
    VANCOUVER -- Kinder Morgan says it will proceed with the $7.4-billion Trans Mountain pipeline expansion as long as it secures satisfactory financing for the project through its initial public offering. The Texas-based company, in conjunction with its indirect subsidiary Kinder Morgan Canada, announced on Thursday its final investment decision on the project, which is conditional on the successful completion of the IPO. Source
  • Amazon opens first brick and mortar New York bookshop

    Economic CTV News
    Online retail giant Amazon on Thursday opened its first brick and mortar bookstore in New York, selling a limited range of its highest-rated books and letting customers browse products as in times gone by. Amazon, which launched as an online bookseller in 1995 but which now sells everything from designer clothes to groceries, bided its time before venturing into the US cultural capital. Source
  • Ontario threatens its own protectionism in fight against Texas Buy American bill

    Economic CTV News
    TORONTO - Ontario has hired lobbyists in Texas and is threatening protectionist measures of its own as it tries to convince state officials not to pass a Buy American bill. Premier Kathleen Wynne claimed victory last month after a successful Ontario push to stop similar provisions in New York state. Source
  • Alberta Energy Regulator to reconsider Suncor tailings plan it rejected

    Economic CTV News
    CALGARY -- Alberta's energy watchdog has agreed to reconsider its rejection of a plan by oilsands giant Suncor to clean up its tailings ponds. The Alberta Energy Regulator denied the Calgary-based company's applications in March, saying they did not satisfy requirements and a new proposal was needed. Source
  • Bank CEOs say Home Capital issues not widespread

    Economic CTV News
    TORONTO -- The CEOs of two of Canada's biggest banks say liquidity troubles at mortgage lender Home Capital are not indicative of a broader problem, but they are monitoring their mortgage portfolios in light of concerns about high house prices. Source
  • Payment systems modernization long overdue: BoC official

    Economic CTV News
    OTTAWA -- A senior Bank of Canada official says modernization of the country's core payments infrastructure is long overdue amid the rapid advance of new technologies -- and the risks that accompany them. In prepared remarks of a speech, deputy bank governor Sylvain Leduc says the system must be able to keep up with new payment options that, in recent years, have included innovations like PayPal, e-transfers and Apple Pay. Source
  • Feds release details of delayed methane reduction plan

    Economic CTV News
    CALGARY -- Companies in the energy sector would be required to regularly check equipment for leaks, make repairs, monitor emission levels and report them to Ottawa under the federal government's proposal to reduce methane emissions. Source
  • Federal government's methane emission reduction plan raises industry concerns

    Economic CTV News
    CALGARY -- Tougher methane emission regulations unveiled Thursday are expected to create oil and gas services jobs, but have raised concern that the costs of implementation could further weaken an industry hit hard by two years of commodity price uncertainty. Source
  • GM accused of installing 'defeat devices' in diesel trucks to beat emissions tests

    Economic CBC News
    A lawsuit on behalf of 705,000 GM Silverado and Sierra diesel truck owners alleges the vehicles have technology on them designed to beat emissions tests. (Rebecca Cook/Reuters) GM has been accused of installing "defeat devices" similar to the ones Volkswagen used in order to beat emissions tests on hundreds of thousands of diesel truck engines. Source
  • New Ford CEO shakes up management team

    Economic CTV News
    DETROIT -- Ford's new CEO is shaking up the company's senior management. The Dearborn, Michigan, automaker named a new head of global product development Thursday, as well as new heads of its operations in North America, Europe and Asia. Source