AVON PRODUCTS INC (Form: 8-K, Received: 10/04/2019 07:06:16)

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): October 4, 2019

AVON PRODUCTS, INC.

(Exact Name of Registrant as Specified in its 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 (see General Instruction A.2 below):

☒ 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))

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.25 per share	AVP	New York Stock Exchange

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. ☐

Item 1.01.

Entry into a Material Definitive Agreement.

Amendment Number One to Merger Agreement

On October 3, 2019, Avon Products, Inc. (the “Company”) entered into Amendment Number One (the “Amendment”) to the Agreement and Plan of Mergers (the “Merger Agreement”), dated May 22, 2019, among the Company, Natura Cosméticos S.A., a Brazilian corporation (sociedade anônima) (“Parent”), Natura &Co Holding S.A., a Brazilian corporation (sociedade anônima) (“HoldCo”), Nectarine Merger Sub I, Inc., a Delaware corporation and a wholly owned direct subsidiary of HoldCo (“Merger Sub I”), and Nectarine Merger Sub II, Inc., a Delaware corporation and a wholly owned direct subsidiary of Merger Sub I (“Merger Sub II”). Pursuant to the terms of the Merger Agreement, (i) HoldCo will, after the completion of certain restructuring steps, hold all issued and outstanding shares of Parent, (ii) Merger Sub II will merge with and into the Company, with the Company surviving the merger and (iii) Merger Sub I will merge with and into HoldCo, with HoldCo surviving the merger and as a result of which each of the Company and Parent will become a wholly owned direct subsidiary of HoldCo (collectively, the “Transactions”).

The Amendment effects certain technical changes to the Merger Agreement to reflect that each HoldCo American Depositary Share (“ADS”) will represent two HoldCo shares and the adjustment to the exchange ratio resulting from the issuance of bonus shares to Parent shareholders on September 17, 2019 (at a ratio of one bonus share for each Parent share). As such, under the terms of the Merger Agreement as amended by the Amendment, if the Transactions are completed, shares of Avon common stock issued and outstanding immediately prior to the consummation of the Transactions (other than as provided in the Merger Agreement) will be converted into the ultimate right to receive, at the election of the holder thereof, (i) 0.300 validly issued and allotted, fully paid-up HoldCo ADSs against the deposit of two HoldCo shares, subject to adjustment in accordance with the terms of the Merger Agreement, and any cash in lieu of fractional HoldCo ADSs or (ii) 0.600 validly issued and allotted, fully paid-up HoldCo shares subject to adjustment in accordance with the terms of the Merger Agreement, and any cash in lieu of fractional HoldCo Shares. The Amendment also reflects the change in HoldCo’s name, which was Natura Holding S.A. as of May 22, 2019 and is now Natura &Co Holding S.A.

The foregoing summary of the Amendment is qualified in its entirety by the full text of the Amendment, which is attached hereto as Exhibit 2.1 and is incorporated by reference herein.

Cautionary Statements for Purposes of the “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995

Statements in this communication that are not historical facts or information may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Among other things, these forward looking statements may include statements regarding the proposed combination of the Company (“we” or “us”) and HoldCo (together with Parent, “Natura &Co”); our beliefs relating to value creation as a result of a potential combination with Natura &Co; the expected timetable for completing the transaction; benefits and synergies of the transaction; future opportunities for the combined company; and any other statements regarding the Company’s and Natura &Co’s future beliefs, expectations, plans, intentions, financial condition or performance. In some cases, words such as “estimate,” “project,” “forecast,” “plan,” “believe,” “may,” “expect,” “anticipate,” “intend,” “planned,” “potential,” “can,” “expectation,” “could,” “will,” “would” and similar expressions, or the negative of those expressions, may identify forward looking statements. They include, among other things, statements regarding our anticipated or expected results, future financial performance, various strategies and initiatives (including our transformation plan, Open Up Avon, stabilization strategies, cost savings initiatives, restructuring and other initiatives and related actions), costs and cost savings, competitive advantages, impairments, the impact of foreign currency, including devaluations, and other laws and regulations, government investigations, results of litigation, contingencies, taxes and tax rates, potential alliances or divestitures,

liquidity, cash flow, uses of cash and financing, hedging and risk management strategies, pension, postretirement and incentive compensation plans, supply chain and the legal status of the representatives. Such forward-looking statements are based on management’s reasonable current assumptions, expectations, plans and forecasts regarding our current or future results and future business and economic conditions more generally. Such forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, levels of activity, performance or achievement of the Company to be materially different from any future results expressed or implied by such forward-looking statements, and there can be no assurance that actual results will not differ materially from management’s expectations. Therefore, you should not rely on any of these forward-looking statements as predictors of future events. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, our ability to improve our financial and operational performance and execute fully our global business strategy, the effect of economic factors, our ability to improve working capital, our ability to reverse declines in active representatives, general economic and business conditions in our markets, our ability to attract and retain key personnel, competitive uncertainties in our markets, any changes to our credit ratings and the impact of such changes on our financing costs, rates, terms, debt service obligations, access to lending sources and working capital needs, the risk of an adverse outcome in any material pending and future litigation and those disclosed as risks in other reports filed by us with the Securities and Exchange Commission (“SEC”), including those described in Item 1A of our most recently filed Annual Report on Form 10-K and subsequent reports on Forms 10-Q and 8-K and those discussed in the proxy statement/prospectus included in the registration statement on Form F-4 (Reg. No. 333-233910) filed by HoldCo with the SEC on September 24, 2019, and declared effective by the SEC on September 27, 2019, and any amendments thereto. Other risks and uncertainties include the timing and likelihood of completion of the proposed combination of the Company and Natura &Co, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals for the proposed transactions that could reduce anticipated benefits or cause the parties to abandon the transactions; the possibility that the Company’s shareholders may not approve the proposed transactions; the possibility that Natura &Co’s shareholders may not approve the proposed transactions; the possibility that the expected synergies and value creation from the proposed transactions will not be realized or will not be realized within the expected time period; the risk that the businesses of the Company and Natura &Co will not be integrated successfully; disruption from the proposed transactions making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred; the possibility that the proposed transactions do not close, including due to the failure to satisfy the closing conditions; the possibility that the intended accounting and tax treatments of the proposed transactions are not achieved; the effect of the announcement, pendency or consummation of the proposed transactions on customers, employees, representatives, suppliers and partners and operating results; as well as more specific risks and uncertainties. We caution readers that any such statements are based on currently available operational, financial and competitive information, and they should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which they were made. Except as required by law, we disclaim any obligation to review or update these forward-looking statements to reflect events or circumstances as they occur.

Participants in the Solicitation

Natura &Co, the Company, their respective directors and certain of their respective executive officers and employees may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information about Natura &Co’s directors and executive officers are set forth in the proxy statement/prospectus included in the registration statement on Form F-4 (Reg. No. 333-233910) filed by HoldCo with the SEC on September 24, 2019, and declared effective by the SEC on September 27, 2019, and any amendments thereto, and information about the Company directors and executive officers is set forth in its definitive proxy statement filed with the SEC on April 2, 2019, which also may be obtained free of charge from the investor relations page of the Company’s website www.Avonworldwide.com. To the extent holdings of Company securities have changed since the amounts contained in the proxy statement for the Company’s 2019 Annual Meeting of Shareholders, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed transaction is included in the proxy statement/prospectus included in the registration statement on Form F-4 (Reg. No. 333-233910) filed by HoldCo with the SEC on September 24, 2019, and declared effective by the SEC on September 27, 2019, and any amendments thereto and may be included in other relevant materials Natura &Co and the Company file with the SEC.

Additional Information and Where to Find It

The proposed transaction involving Natura &Co and the Company will be submitted to the Company’s shareholders and Natura &Co’s shareholders for their consideration. In connection with the proposed transaction, HoldCo has filed with the SEC on September 24, 2019 a registration statement on Form F-4 (Reg. No. 333-233910) that includes a proxy statement/prospectus for the Company’s shareholders. The registration statement was declared effective by the SEC on September 27, 2019. The Company will mail the definitive proxy statement/prospectus to its shareholders, and the Company and Natura &Co may file other documents regarding the proposed transaction with the SEC. This communication is not intended to be, and is not, a substitute for such filings or for any other document that Natura &Co or the Company may file with the SEC in connection with the proposed transaction. SECURITY HOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE REGISTRATION STATEMENT ON FORM F-4 AND THE PROXY STATEMENT/PROSPECTUS AND ANY AMENDMENTS THERETO AND ANY OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. The registration statement, the proxy statement/prospectus and any amendments thereto and other relevant materials and any other documents filed or furnished by Natura &Co or the Company with the SEC may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, security holders will be able to obtain free copies of the registration statement, the proxy statement/prospectus and any amendments thereto from Natura &Co by going to www.NaturaeCo.com and from the Company by going to its investor relations page on its corporate web site at www.Avonworldwide.com.

No Offer or Solicitation

This communication is neither an offer to buy, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description of Exhibit

2.1		Amendment Number One, dated as of October 3, 2019, to the Agreement and Plan of Mergers, dated as of May 22, 2019, among Avon Products, Inc., Natura Cosméticos S.A., Nectarine Merger Sub I, Inc., Nectarine Merger Sub II, Inc. and Natura &Co Holding S.A.

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.

	By:	/s/ Ginny Edwards
		Name: Ginny Edwards
		Title: Vice President, Interim General Counsel and Corporate Secretary

Date: October 4, 2019

Exhibit Index

Exhibit		Description

2.1		Amendment Number One, dated as of October 3, 2019, to the Agreement and Plan of Mergers, dated as of May 22, 2019, among Avon Products, Inc., Natura Cosméticos S.A., Nectarine Merger Sub I, Inc., Nectarine Merger Sub II, Inc. and Natura &Co Holding S.A.

AMENDMENT NUMBER ONE TO AGREEMENT AND PLAN OF MERGERS

This Amendment Number One (this “Amendment”) to the Agreement and Plan of Mergers, dated as of May 22, 2019 (the “Merger Agreement”), by and among Natura Cosméticos S.A., a Brazilian corporation (sociedade anônima) (“Parent”), Avon Products, Inc., a New York corporation (the “Company”), Nectarine Merger Sub I, Inc., a Delaware corporation and wholly owned direct subsidiary of HoldCo (“Merger Sub I”), Nectarine Merger Sub II, Inc., a Delaware corporation and wholly owned direct subsidiary of Merger Sub I, and Natura &Co Holding S.A., a Brazilian corporation (sociedade anônima) (“HoldCo”), is made as of October 3, 2019. Capitalized terms used but not defined in this Amendment shall have the meanings ascribed to them in the Merger Agreement.

RECITALS

WHEREAS, Parent, the Company, Merger Sub I, Merger Sub II and HoldCo entered into the Merger Agreement on May 22, 2019.

WHEREAS, Section 11.03 of the Merger Agreement permits the parties to amend the Merger Agreement by an instrument in writing signed by the parties hereto.

WHEREAS, the parties hereto desire to amend the Merger Agreement as set forth herein.

WHEREAS, the parties acknowledge and agree that certain of the amendments to the Merger Agreement set forth herein are intended to reflect (i) the Exchange Ratio as it was adjusted in accordance with the terms of the Merger Agreement and Section 7.01 of the Parent Disclosure Letter in connection with the Profit Capitalization (as defined in the Parent Disclosure Letter) consummated on September 17, 2019 and (ii) the parties’ desire that each validly issued and allotted, fully paid-up HoldCo ADS be issued against the deposit of two HoldCo Shares.

NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereof, and intending to be legally bound hereby, pursuant to Section 11.03 of the Merger Agreement, the parties hereto agree as follows:

AGREEMENT

SECTION 1.1 Updates to HoldCo Name. All references in the Merger Agreement and all exhibits and schedules thereto (including in the Company Disclosure Letter and the Parent Disclosure Letter) to “Natura Holding S.A.” shall be deemed replaced with “Natura &Co Holding S.A.”

SECTION 1.2 Amendments to Recitals. Clause (b) of the first recital of the Merger Agreement is hereby amended and restated to replace the text “with each such HoldCo ADS representing 1 HoldCo Share” with the text “with each such HoldCo ADS representing 2 HoldCo Shares”.

SECTION 1.3 Amendments to Section 2.03(b)(i). The first two sentences of Section 2.03(b)(i) of the Merger Agreement are hereby amended and restated in their entirety as follows:

“Except as otherwise provided in Section 2.03(b)(ii) and Section 2.05 and subject to adjustment in accordance with Section 2.08, each Merger Sub I Share outstanding (and each right to receive such Merger Sub I Shares) as of immediately prior to the Second Effective Time shall be converted into the right to receive 0.300 validly issued and allotted, fully paid-up HoldCo ADSs against the deposit of two HoldCo Shares (together with the cash in lieu of fractional HoldCo ADSs (or HoldCo Shares) provided for in Section 2.05, the “Common Stock Consideration” and, together with the Preferred Stock Consideration, the “Merger Consideration”). Notwithstanding anything to the contrary in this Agreement, the holders of Merger Sub I Shares as of immediately prior to the Second Effective Time may elect to receive 0.600 (the “Exchange Ratio”) validly issued and allotted, fully paid-up HoldCo Shares in lieu of the Common Stock Consideration, in which case (1) any and all HoldCo Shares delivered to such holders who have elected to receive HoldCo Shares shall, for all purposes of this Agreement, be deemed to be the Common Stock Consideration and (2) Parent shall be deemed to have satisfied its obligations under this Agreement with respect to HoldCo ADSs through the registration, issuance, delivery and listing of HoldCo Shares.”

SECTION 1.4 Amendments to Section 2.04.

(a) The second sentence of Section 2.04(a) of the Merger Agreement is hereby amended and restated in its entirety as follows:

“At or prior to the Closing, the Parent Entities shall have deposited, or shall have caused to be deposited with or provided to, (1) the Depositary Bank, or a nominee for the Depositary Bank, a number of HoldCo Shares equal to (x) the aggregate number of HoldCo ADSs to be issued as Common Stock Consideration multiplied by (y) two and (2) the Exchange Agent, in escrow (x) for the benefit of the holders of Company Common Stock, irrevocable written instruction to cause the aggregate number of HoldCo ADSs to be issued as Common Stock Consideration and receipts (or uncertificated book-entries, as applicable) representing such aggregate number of HoldCo ADSs, (y) for the benefit of the holders of Company Common Stock, a number of HoldCo Shares (or uncertificated book-entries, as applicable) to be issued as Common Stock Consideration as contemplated by the second sentence of Section 2.03(b)(i) and (z) for the benefit of the holders of the Series C Preferred Stock, an amount in cash in U.S. dollars sufficient to pay the Preferred Stock Consideration.”

(b) The fourth sentence of Section 2.04(b) of the Merger Agreement is hereby amended and restated in its entirety as follows:

“For the avoidance of doubt, pursuant to the foregoing provisions, each Person entitled to receive Merger Sub I Shares in the First Merger shall instead receive 0.300 HoldCo ADSs per Merger Sub I Share (or at such Person’s option, 0.600 HoldCo Shares) to be issued following the Second Merger as the Common Stock Consideration.”

SECTION 1.5 Amendments to Section 7.11(a). The third sentence of Section 7.11(a) of the Merger Agreement is hereby amended and restated in its entirety as follows:

“In any event, subject to the prior sentence and Applicable Law, the Deposit Agreement shall (i) provide (A) that each HoldCo ADS under the ADR Facility shall represent and be exchangeable for two HoldCo Shares, (B) for customary provisions for the voting by the Depositary Bank of such HoldCo Shares as instructed by the holders of the HoldCo ADSs, (C) for the issuance, at the request of a holder, of either certificated or uncertificated ADRs, (D) subject to the limitations provided for in General Instruction I.A.1 of Form F-6, that holders of HoldCo ADSs shall have the right at any time to exchange their HoldCo ADSs for the underlying HoldCo Shares and (E) that the HoldCo Shares deposited by the Parent Entities with the custodian (the “Custodian”) for the ADR Facility shall be held by the Custodian for the benefit of the Depositary Bank, (ii) require the Depositary Bank to forward voting instructions and other shareholder communications (including notices, reports and proxy solicitation materials) to the registered holders of HoldCo ADSs promptly following its receipt of such materials, (iii) include customary provisions for the distribution to holders of HoldCo ADSs of dividends, other distributions or the rights to participate in any rights offerings in each case received by the Custodian from the Parent Entities (or in certain cases the U.S. dollars available to the Depositary Bank from the net proceeds of the sale of the foregoing) and (iv) not permit (x) except as required by Applicable Law, any amendment that prejudices any right of HoldCo ADS holders without giving at least 30 days’ notice to the holders of the outstanding HoldCo ADSs, or (y) any termination by HoldCo or the Depositary Bank on less than 30 days’ written notice to HoldCo ADS holders.”

SECTION 1.6 Additional Representations and Warranties. Each of the parties represents and warrants that (a) this Amendment has been duly executed and delivered by it and (b) this Amendment constitutes the legal, valid and binding obligation of each of the parties, enforceable against each such party in accordance with its terms (subject, as to enforceability, to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity).

SECTION 1.7 Full Force and Effect. Except to the extent specifically amended hereby, the Merger Agreement remains unchanged and in full force and effect. From and after the execution of this Amendment, each reference in the Merger Agreement to “this Agreement,” “hereof”, “hereunder” or words of similar import, will be deemed to mean the Merger Agreement, as amended by this Amendment, each reference in the Merger Agreement to the “Company Disclosure Letter” will be deemed to mean the Company Disclosure Letter as amended pursuant to Section 1.1 hereof and each reference in the Merger Agreement to the “Parent Disclosure Letter” will be deemed to mean the Parent Disclosure Letter as amended pursuant to Section 1.1 hereof.

SECTION 1.8 General Provisions. The provisions of Article 11 (Miscellaneous) of the Merger Agreement shall, to the extent not already set forth in this Amendment, apply mutatis mutandis to this Amendment, and to the Merger Agreement as modified by this Amendment, taken together as a single agreement, reflecting the terms as modified hereby.

[Remainder of this page is intentionally left blank; signature page follows.]

NATURA COSMÉTICOS S.A.

By:	/s/ Jose Antonio de Almeida Filippo
	Name:	Jose Antonio de Almeida Filippo
	Title:	Chief Financial and Investor Relations Officer

NATURA &CO HOLDING S.A.

By:	/s/ Jose Antonio de Almeida Filippo
	Name:	Jose Antonio de Almeida Filippo
	Title:	Executive Officer

By:	/s/ Itamar Gaino Filho
	Name:	Itamar Gaino Filho
	Title:	Chief Legal Officer

NECTARINE MERGER SUB I, INC.

By:	/s/ Robert Claus Chatwin
	Name:	Robert Claus Chatwin
	Title:	President

NECTARINE MERGER SUB II, INC.

By:	/s/ Robert Claus Chatwin
	Name:	Robert Claus Chatwin
	Title:	President