LONDON, Jan. 8, 2019 /PRNewswire/ -- Avon Products, Inc. (NYSE: AVP) ("the Company"), a globally recognised leader in direct selling of beauty and related products, today announced it has entered into a definitive agreement with TheFaceshop Co., Ltd., a subsidiary of LG Household & Health Care Ltd., one of Asia's largest consumer goods and beauty companies, under which TheFaceShop will acquire all of the shares of Avon's Beauty manufacturing operation in Guangzhou, China. Net proceeds to Avon will be $44 million.
The companies also agreed to enter into a manufacturing and supply agreement, under which the Guangzhou factory will manufacture products for Avon's fast-growing Chinese business and other markets, while maximizing the capacity of the plant for its own production. Avon's associates at the facility will remain with the operation.
These agreements are another step in Avon's strategic shift to opening up its business mindset with best in class partners to efficiently manufacture and deliver products, in service of the millions of beauty entrepreneurs and their customers around the world.
Jan Zijderveld, CEO of Avon, said, "This transaction is a significant step forward in our efforts to 'Open Up Avon' by operating more efficiently, with a leaner, more agile global infrastructure. This agreement provides us with greater operational and financial flexibility, while allowing us to benefit from the local knowledge, world-class products, R&D expertise and infrastructure of internationally-recognized partners such as LG H&H. By operating with a local structure that fits our purpose, we will be better positioned to capture the significant opportunity in China and the wider Asian market. We know LG H&H well and believe that they will continue to be a strong partner for Avon as we collectively seek to grow our business in the region."
Suk Cha, CEO of LG Household & Health Care, said, "We are pleased to have reached this agreement with Avon and add a state-of-the-art facility with powerful capabilities to deliver quality products for the fast-growth local market. Our past interactions with Avon provide us a sound understanding of its brand power and global reach, and we look forward to continuing our relationship with Avon as we both explore ways to grow our product lines, bring desirable products to market faster, and each accelerate our growth across Asia."
The transaction is expected to close by February 2019 following customary local regulatory approvals.
About Avon Products, Inc.
Avon is the Company that for 130 years has proudly stood for beauty, innovation, optimism and, above all, for women. Avon products include well-recognised and beloved brands such as ANEW, Avon Color, Avon Care, Skin-So-Soft, and Advance Techniques sold through approximately 6 million active independent Avon Sales Representatives. Learn more about Avon and its products at www.avoncompany.com.
About LG Household & Health Care Ltd.
LG Household & Health Care (LG H&H) is the #1 consumer goods company in Korea, with leading positions in all major categories including cosmetics, personal care, home care and beverages. The company is listed on the Korea Stock Exchange with a market capitalization of USD 18 billion as of December 1, 2018 and full-year revenue is approximately USD 6 billion (based on Bloomberg Estimates). In recent years, LG H&H has accelerated expansion beyond Korea, with leading luxury cosmetics brands such as 'The history of Whoo', 'su:m' and 'belif', and is now within the top 10 global cosmetics companies in Asia.
This press release contains "forward-looking statements" that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements relating to the Company's strategy and future growth in Asia. Because forward-looking statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the possibility of business disruption, competitive uncertainties, and general economic and business conditions in Avon's markets as well as the other risks detailed in Avon's filings with the Securities and Exchange Commission. Avon undertakes no obligation to update any statements in this press release for changes that happen after the date of this release.
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