Avon Rejects $10 Billion Takeover Offer From Coty |
| Wall Street Journal - Apr 2, 2012 |
Fragrance maker Coty Inc. made an unsolicited offered to buy Avon Products Inc. for $10 billion, taking advantage of the larger company's weakened position to pursue a deal that would expand its offerings and geographic reach.
Avon immediately rejected the offer as uncertain and stingy. The approach comes as Avon is entangled in a search for a new CEO, a strategic overhaul needed to reverse a string of disappointing financial results, and investigations by federal authorities into alleged bribery overseas.
A deal would be a big bite for Coty Chief Executive Bernd Beetz, who has expanded Coty via a string of acquisitions in recent years but whose company remains less than half Avon's size by revenue. In addition to dealing with the Foreign Corrupt Practices Act investigations, he would have to get a handle on Avon's door-to-door business model and sprawling international footprint.
Acquiring Avon would expand Coty's presence in emerging markets—where it gets about a quarter of its revenue, compared with two-thirds for Avon—and help its goal of expanding deeper into skin care. In a letter to Avon Chairwoman Andrea Jung made public Monday, Coty said the two companies have complementary strengths.
Read Full Article from Wall Street Journal
- Posted: 2012-04-02 11:32:14
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