Avon has announced that is has sold all shares in its Chinese beauty manufacturing operations to LG-owned Asian consumer goods and beauty company The Face Shop for a price of $44 million.
As part of the sale, the two companies have drawn up a manufacturing and supply agreement whereby The Face Shop will continue to manufacture products for Avon’s Chinese business and other markets, with Avon employees remaining at the Guangzhou factory.
According to Avon, the sale aligns with its strategy to open up its business mindset, working with experts to manufacturer and deliver products. Subject to local regulatory approvals, the deal is expected to close by February end.
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.”