UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K


CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 25, 2019


Avon Products, Inc.
(Exact name of registrant as specified in charter)


New York
 
1-4881
 
13-0544597
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)

Building 6, Chiswick Park
London W4 5HR
United Kingdom
(Address of principal executive offices) (Zip Code)

+44-1604-232425
(Registrant’s telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐




INFORMATION TO BE INCLUDED IN THE REPORT

Item 8.01  Other Events.

On April 25, 2019, Avon NA Holdings LLC (“Avon NA Holdings”), a wholly-owned subsidiary of Avon Products, Inc. (the “Company”), entered into a Unit Purchase Agreement (the “Agreement”) with Cleveland NA Investor LLC (“Cerberus Investor” and, together with Avon NA Holdings, “Sellers”), an affiliate of funds managed or advised by Cerberus Capital Management (“Cerberus”), and LG Household & Health Care Ltd. (the “Purchaser”), whereby the Purchaser will acquire all of the interests of New Avon LLC (“Avon North America”) as further described below (the “Transaction”).

Under the terms of the Agreement, at the closing of the Transaction (the “Closing”) the Purchaser will acquire Avon North America for $125 million in cash. At the Closing, Avon NA Holdings will receive $24.875 million in cash for 19.9% of Avon North America’s outstanding Class A interests, representing all of the Company’s interests in Avon North America, and Cerberus Investor will receive $100.125 million in cash for 80.1% of Avon North America’s outstanding Class A interests, representing all of Cerberus’s interests in Avon North America, in each case subject to reduction for (i) certain losses incurred by the Purchaser in the event of breaches of representations, warranties and covenants, (ii) the settlement of certain disputed matters with a supplier and (iii) the payment of certain expenses and fees related to the Transaction. Following the Closing, the Company will no longer, directly or indirectly, own any interests in Avon North America and Avon NA Holdings will cease to be a member of Avon North America.

The Closing will occur on September 30, 2019 or any other date as agreed by the Purchaser and Sellers, subject to satisfaction of customary conditions, including the receipt of approval, or the expiration of the waiting period, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Avon North America will continue to license the right to use the Avon brand name in North America after the consummation of the Transaction.

On April 25, 2019, the Company issued a press release announcing the execution of the Agreement. A copy of that press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.


Item 9.01  Financial Statements and Exhibits.

(d) Exhibits


Exhibit
No.
 
Description
     
99.1
 
Press Release of Avon Products, Inc. dated April 25, 2019





SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
AVON PRODUCTS, INC.
 
 
(Registrant)
 
       
       

By:
/s/ Ginny Edwards
 
   
Name:  Ginny Edwards
 
   
Title:    Vice President and Corporate Secretary
 
       

Date:  April 25, 2019









EXHIBIT INDEX


Exhibit 99.1


Avon Products Comments on Avon North America Transaction

LONDON, April 25, 2019 – Avon Products, Inc. (NYSE: AVP) (“Avon Worldwide”), a globally recognised leader in direct selling of beauty products, today commented on the announcement by New Avon LLC (“Avon North America”), that it has entered into an agreement to be acquired by LG Household & Health Care Ltd. (LG H&H).

In March 2016 Avon’s North American business was separated into a privately-held company – New Avon – as a result of a strategic partnership transaction between Avon Worldwide and an affiliate of Cerberus Capital Management, L.P. (“Cerberus”). Avon North America is majority-owned and managed by Cerberus. Avon Worldwide retained a minority interest in Avon North America which LG H&H will acquire as part of its transaction.

Jan Zijderveld, CEO of Avon Worldwide, said “We have built a strong relationship with LG H&H and know them to be a great partner. We believe this transaction is a testament to LG’s belief in the strength of Avon’s brand and business model, and are excited to see the progress that Avon North America makes as part of LG H&H. At Avon Worldwide, we remain focused on executing our strategy to ‘Open Up Avon.’ We are operating with urgency as we renew our focus on our Representatives, reboot direct selling, simplify our operations and digitise the business. We are seeing signs that our efforts are taking hold and are confident that we are on the right path to returning to growth and driving value for our shareholders.”

Chan W. Galbato, Chief Executive Officer of Cerberus Operations and Advisory Company, LLC and Non-Executive Chairman of Avon Worldwide, said, “Avon is a leading brand in the global beauty business and we are pleased with the consistent progress Avon Worldwide is making to become the leading digital social selling beauty company. The Board and management team are committed to, and excited about, the opportunities that lie ahead to leverage Avon’s rich history and strong foundation to drive the next chapter. Cerberus is committed to the ‘Open Up Avon’ strategy and to Avon Worldwide’s return to growth.”

The transaction between the separate Avon North America business and LG H&H has no impact on Avon Worldwide’s current operations or strategy. Further, this transaction is unrelated to Avon Worldwide’s previously announced sale of its beauty manufacturing operation in Guangzhou, China to a subsidiary of LG H&H, and the subsequent manufacturing and supply agreement, which was completed in February, 2019.

Today, Avon Worldwide operates in over 50 countries with millions of independent Representatives, with leading market positions in Argentina, Brazil, Mexico, Russia and the Philippines. Avon Worldwide continues to aggressively pursue and make progress on its strategy to ‘Open Up Avon’, unveiled in September 2018. The strategy is designed to renew Avon Worldwide’s focus on its Representatives, simplify operations, modernise the brand and digitise the business, while restoring the competitiveness and cost discipline.




About Avon Products, Inc (Avon Worldwide)
For 130 years Avon has stood for women: providing innovative, quality beauty products which are primarily sold to women, through women.  Millions of independent sales Representatives across the world sell iconic Avon brands such as Avon Color and ANEW through their social networks, building their own beauty businesses on a full- or part-time basis.  Avon supports women’s empowerment, entrepreneurship and well-being and has donated over $1billion to women’s causes through Avon and the Avon Foundation.  Learn more about Avon and its products at www.avonworldwide.com. #Stand4Her

Forward-Looking Statements
This press release contains “forward-looking statements” that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements relating to the Company’s transformation plan, its business strategy and future growth.  Because forward-looking statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements.  These risks and uncertainties include, but are not limited to, the possibility of business disruption, competitive uncertainties, and general economic and business conditions in Avon’s markets as well as the other risks detailed in Avon’s filings with the Securities and Exchange Commission. Avon undertakes no obligation to update any statements in this press release for changes that happen after the date of this release

INVESTORS:
Amy Greene, Vice President, Investor Relations, Avon Products, Inc.
(US) + 001 212 282 5320
Email: amy.greene@avon.com

MEDIA:
Natalie Deacon, Executive Director Communications, Avon Products, Inc.
(UK) + 44(0) 7725 150853
Email: media.enquiries@avon.com / natalie.deacon@avon.com