Avon to Sell China Manufacturing Business for $44M
Avon Products Inc. plans to sell its China manufacturing business to TheFaceshop Co. Ltd.
Under the terms of the deal, Faceshop, an LG Household & Health Care Ltd. subsidiary, will acquire all shares of Avon's beauty manufacturing operations in Guangzhou, China. Avon expects $44 million in proceeds from the deal.
The two parties have an agreement that the facility will continue to manufacture products for Avon, while also handling manufacturing for Faceshop.
"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," Avon chief executive officer Jan Zijderveld said in a statement. "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 LA H&H. By operating with a local structure that fits our purpose, we will be better positioned to capture the significant opportunity in Chin and the wider Asian market."
This is one of many moves Zijderveld has made since he joined Avon from Unilever in 2018. He's hired a slew of new executives, many with regional market expertise, and has worked to digitize the direct-selling company with e-brochures and other modernized tools for representatives. In September, Avon said it would consolidate U.S. operations into Suffern, N.Y., and plan to sell its Rye, N.Y., facility.
The business has struggled in recent years, and in 2016 sold a majority stake in the North America operations to private equity firm Cerberus Capital Management.
The sale of the China manufacturing facility is expected to close by February.
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