Natura & Co, a renowned Brazilian cosmetics company, has agreed to sell its subsidiary, The Body Shop, to the private investor Aurelius Group. This transaction values the business at 207 million UK pounds ($254.32 million), marking Natura’s second significant divestiture in 2023, following the sale of luxury brand Aesop to L’Oreal for $2.53 billion earlier in April.
Following the announcement, Natura’s shares surged up to 8% in Sao Paulo, positioning it as one of the top performers on the Bovespa stock index. The sale agreement includes a potential additional payment (earn-out) of 90 million pounds, payable within five years.
CEO Fabio Barbosa highlighted that this move is a crucial step in Natura & Co’s new development cycle, aiming to streamline operations, focus on its core business in Latin America, and optimise Avon International’s presence.
The decision to sell The Body Shop comes six years after its acquisition from L’Oreal, with Natura entering exclusive talks with Aurelius last month. Analysts from JPMorgan view the sale positively, with the deal’s value exceeding initial estimates of $200-300 million and potentially leading to extraordinary dividends for shareholders.
Natura’s recent strategy has been directed towards cutting debt and returning to profitability, as evidenced by its significant net profit in the third quarter, rebounding from a previous year’s loss, largely due to the Aesop sale.
