SAO PAULO (Reuters) - Brazilian cosmetics maker Natura said on Thursday it has agreed to sell its Avon International unit to holding firm Regent, ending a long period of uncertainty after announcing last year it was weighing alternatives for the business arm.
The sale of the unit, which aggregates Avon's businesses outside Natura's key Latin American market, sent Sao Paulo-traded shares in the company up more than 13%.
Natura has been carrying out divestitures as part of a broader strategy to simplify
its structure, integrate business units and focus on Latin America, after struggling with profitability in recent years.
The company had previously sold the Aesop and The Body Shop brands, and earlier this week announced a deal to sell Avon's businesses in Central American countries to Grupo PDC.
The sale of Avon International to an acquisition vehicle affiliated with Regent includes operations in Europe, Africa and Asia, Natura said in a statement.
It does not comprise Avon's Russian business, which remains earmarked as "held for sale," nor its operations in Latin America, which are "at the core of Natura's strategic priorities," the cosmetics maker said.
Avon's U.S. business, which was never owned by Natura, is also not a part of the deal.
Natura will receive a nominal consideration of 1.00 pound ($1.36) at closing, according to the company, followed by contingent payments based on future results and certain liquidity events limited to 60 million pounds.
Natura first said last year it was "weighing alternatives" for Avon International, which had been posting lower margins than the group's Latin American operations. In August it reclassified the unit as an "asset for sale."
Analysts at Santander said the move should have positive implications for Natura, as it reduces concerns of additional cash injection requirements to sustain Avon's operations. "Avon International has been a cash-burning unit," they noted.
($1 = 0.7343 pounds)
(Reporting by Isabel Teles and Gabriel Araujo; Editing by Aida Pelaez-Fernandez and Chris Reese)
