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Natura, Avon confirm talks on "potential transaction"

Beauty products companies Natura Cosméticos SA and Avon Products Inc. both issued statements March 22 confirming that they have engaged in discussions about a "potential transaction," without giving further details about the nature of their discussions.

"[T]he company confirms that it has engaged in discussions with [Avon] concerning a potential transaction involving both companies," Natura said in its statement. "Natura does not intend to comment further at this time, but will communicate to the market if and when appropriate."

Natura said it was responding to a report in The Wall Street Journal published March 22 that said the two companies have discussed the possibility Natura would acquire Avon’s North American business, which is now a separate, private company, as well as Avon's remaining operations in the publicly-traded company. The report cited an unnamed source.

Avon said it held "preliminary discussions" with the Brazilian company.

Activist investors have been pushing for strategic changes at Avon, including the possibility of a sale.

Avon shares rose 10.1% to end the day March 22 at $3.06 while Natura's lost 7.8% to end at 41.50 Brazilian reais.

As of March 22, US$1 was equivalent to 3.90 Brazilian reais.