Body Shop parent to buy Avon for £1.6bn | Calamatta Cuschieri

Today’s article gives an overview of the Maltese, European and U.S. markets on Tuesday, together with latest news about leading social selling beauty company in North America

The Maltese market closed in the green on Wednesday, with MSE Equity Total Return Index ending the session 1.921% higher, to 9,861.738 points. Best performer was Medserv plc by adding 14.43% to close at 1.11. Followed by Malta International Airport plc and Trident Estates plc. Both jumped 12.77% and 10% to close at 7.95 and 1.65 respectively. Simonds Farsons Cisk plc rose 1.94% to 10.50, while MIDI plc advanced 1.69% to 0.60. Malta Properties Company plc closing list of gainers with 1.67% increase to close at 0.61. Biggest fall was seen from Malita Investment plc, it shed 1.20% to 0.825. Followed by Lombard Bank Malta plc and PG plc which fell 0.86% and 0.61% to close at 2.30 and 1.64 respectively. GO plc, International Hotel Investments plc and RS2 Software plc were active but closed unchanged.

European shares edged lower on Wednesday on unease over developments in the U.S.-China trade war and Britain’s uncertain departure from the European Union. The pan-European STOXX 600 index closed down 0.08% with losses on Italy’s MIB and France’s CAC offset by gains in Britain’s FTSE 100 and Germany’s DAX. Europe’s banking index fell 1.2% to an over four-month low with Banco Santander, Lloyds and Barclays shedding between 1.1% and 2.7%.

U.S. stocks finished lower Wednesday as lingering trade woes overshadowed the release of the minutes from the Federal Reserve’s policy meeting that was largely interpreted as accommodative. The Dow Jones Industrial Average dropped 0.4%, to 25,776.61 and the S&P 500 index fell 0.3%, to 2,856.27. The Nasdaq Composite Index slipped 0.5%, to 7,750.84.

Brazilian cosmetics group Natura has announced that it is buying UK-based direct-selling cosmetics business Avon.

Natura, which already owns The Body Shop and Aesop, is Brazil's top business in cosmetics, perfumes and toiletries. The deal will create the world's fourth-largest cosmetics company. The new combined company will boast 3,200 stores worldwide with a presence in 100 countries.

Avon has been struggling to modernize its global business over the last few years, as its door-to-door sales model has become less popular in the internet age. In 2016, the company said it was moving its headquarters from New York to the UK "over time" while cutting 2,500 jobs worldwide as part of a turnaround plan. At the same time, Avon sold its US operations to investment fund Cerberus. In April, LG Household & Health Care agreed to acquire both Avon and Cerberus' stakes in the US business.

Avon already has 2.2 million direct marketing consultants in Brazil. Natura has a similar business model and many Avon representatives in Brazil also sell Natura products too. The Brazilian cosmetics maker purchased The Body Shop in a deal believed to be worth 1bn euros ($1.1bn; £880m) from French beauty group L'Oreal in 2017. Since then, Natura has been trying to turn The Body Shop around, which has suffered from increased competition and a difficult retail environment. L'Oreal bought the business for around €940m in 2006 at the height of its success but it has failed to thrive since.

 

This article was issued by Nadiia Grech, Junior Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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