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

  • Ikea readies its first East Coast store, touted as Canada's most sustainable

    Economic CTV News
    HALIFAX - Ikea is getting ready to officially open its first Atlantic Canadian store this week as thousands from across the region are expected to descend upon the popular Swedish furniture chain's new Halifax-area location. Source
  • Striking GM CAMI workers awaiting response to weekend contract proposal

    Economic CTV News
    TORONTO -- The union representing 2,500 striking workers at GM Canada's CAMI assembly plant in Ingersoll, Ont., says the company has yet to respond to a comprehensive proposal put forward on the weekend. Unifor spokesman Mike Van Boekel says he expects it will take General Motors of Canada, which owns the plant, about a day to analyze the costs of the proposal. Source
  • Trudeau urges Canadian companies to seek fortune in China's $5 trillion market

    Economic CTV News
    TORONTO -- Prime Minister Justin Trudeau is urging Canadian small- and medium-sized businesses to look beyond Canada's borders and explore the US$5 trillion retail opportunity in China. Trudeau is speaking at a Toronto conference today hosted by Chinese e-Commerce giant Alibaba, with politicians from all three levels of government in attendance. Source
  • American business group says loss of free trade with U.S. would be a big concern

    Economic CTV News
    OTTAWA - A new report says potential changes to NAFTA and a loss of free trade with the United States represent the biggest concerns for a number of big American firms operating in this country. Source
  • French truck drivers block roads to protest labour changes

    Economic CTV News
    PARIS -- French truck drivers staged road blockages near fuel depots across the country Monday to protest against President Emmanuel Macron's changes to labour laws. Two major unions, CGT and FO, called a nationwide protest action because they fear the new rules Macron formally signed last week will lead to a deterioration in working conditions and ease the firing of workers. Source
  • Alibaba launching payment processing service AliPay in Canada

    Economic CBC News
    E-commerce giant Alibaba.com is launching its mobile payment service AliPay in Canada. The service allows Alibaba customers to use AliPay to easily pay Canadian merchants who sign up for the program. Alibaba is by far the most popular online sales website in China, and AliPay allows Chinese customers to buy products from abroad without any difficulties with currency conversion. Source
  • New Uber CEO apologies for company's past mistakes, vows change

    Economic CBC News
    The new CEO of Uber offered contrition for past mistakes on Monday, just days after London's transport authority said it would scrap the company's operating license. Dara Khosrowshahi issued a letter to London's Evening Standard newspaper acknowledging the company "has got things wrong along the way" as it expanded. Source
  • Uber CEO apologizes to London users for company's mistakes

    Economic CTV News
    LONDON -- The new CEO of Uber offered contrition for past mistakes on Monday, just days after London's transport authority said it would scrap the company's operating license. Dara Khosrowshahi issued a letter to London's Evening Standard newspaper acknowledging that the company "has got things wrong along the way" as it expanded. Source
  • Cenovus reaches agreement to sell Suffield assets for $512M

    Economic CTV News
    CALGARY - Cenovus Energy Inc. (TSX:CVE) says it has reached an agreement to sell its Suffield crude oil and natural gas operations in southern Alberta to International Petroleum Corporation for $512 million in cash. A release from the Calgary-based oilsands company says the sale, which includes Cenovus' properties on Canadian Forces Base Suffield and the adjacent Alderson property, is expected to close in the fourth quarter, subject to closing conditions. Source
  • NAFTA talks becoming 'a little more heated,' says Canada's chief negotiator

    Economic CBC News
    U.S. trade negotiators will only partially unveil new text on modifying a key chapter on investment under NAFTA, two well-placed sources said on Sunday, underlying the cautious pace of talks that are supposed to wrap up by the end of the year. Source