Avon Products, Inc. (NYSE:AVP) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On January 8, 2019, Avon Products, Inc. (the “Company”), through its affiliates Avon Asia Holdings Company and Avon Products (China) Co., Ltd (the “Affiliates”) entered into an Equity Purchase Agreement (the “Agreement”) with TheFaceShop Co., Ltd., an affiliate of LG Household & Health Care Ltd. (the “Purchaser”) whereby the Purchaser will acquire all of the equity interests in Avon Manufacturing (Guangzhou), Ltd. (the “Acquired Entity”) for a total purchase price of $71 million. The purchase price includes approximately $22.5 million in cash for the required repayment by the Company of certain outstanding intercompany loans and approximately an additional $4.5 million for cash in the operation, for a net purchase price of approximately $44 million. In accordance with the Agreement, a subsidiary of the Company will grant to the Acquired Entity a limited purpose license to maintain and use the current name of the Acquired Entity. The Agreement contains the usual and customary provisions for escrow, covenants, representations, warranties, conditions precedent and indemnification obligations. The closing is expected to take place during the first quarter of 2019 and is subject to customary local regulatory approvals. In accordance with the Agreement, a subsidiary of the Company also entered into a Manufacturing and Supply Agreement with the Acquired Entity, under which the Acquired Entity will continue to manufacture products for Avon’s China business and other Avon markets.
About Avon Products, Inc. (NYSE:AVP)
Avon Products, Inc. is a manufacturer and marketer of beauty and related products. The Company’s product categories are Beauty, and Fashion and Home. Beauty consists of skincare (which includes personal care), fragrance and color (cosmetics). Fashion and Home consists of fashion jewelry, watches, apparel, footwear, accessories, gift and decorative products, housewares, entertainment and leisure products, children’s products and nutritional products. The Company’s segments are based on geographic operations and include commercial business units in Latin America; Europe, Middle East and Africa, and Asia Pacific. The Company’s business is conducted primarily in one channel, direct selling. The Company’s products include Anew Clinical Overnight Hydration Mask, Anew Power Serum, Ultra Color Indulgence Lip Color, SuperExtend Winged Out Mascara, Big & False Lash Volume Mascara, Outspoken Party! by Fergie Fragrance and Avon Attraction for Him and for Her Fragrances.
