The Philippine Competition Commission approved the acquisition of Avon Products Inc. by Natura Cosméticos S.A. (Natura), marking the merger of two of the world’s popular beauty and personal care brands with presence and following in the Philippines.
Avon Products is a direct selling company in beauty, household and personal care categories with a home base in New York, US. Natura Group—which includes Natura Cosméticos, Aesop and The Body Shop—is a global personal care cosmetics group headquartered in São Paulo, Brazil.
The commission found that the takeover Avon by cosmetics giant Natura did not result in substantial lessening of competition in the beauty and personal care products market mainly because Natura and Avon were not competing in the same market.
The PCC also noted the minimal substitution between the beauty products of Natura and Avon, with both parties catering to different consumer segments. Given the different target markets, the beauty products on their respective racks also have significant price differences.
The PCC said the two parties had different modalities for distribution of their products and told the regulator they would retain their current distribution business models after the buyout.
Avon popularized the door-to-door cosmetic sales through its “Avon ladies” and committed maintain its direct selling business model. Body Shop, meanwhile, reported it would also continue its business modality as a specialty store.
The merger review looked into what consumers considered to be Body Shop’s list of competitors, such as Lush, InnisFree and Kiehl’s, among others; while Avon was found to be competing more with Ever Bilena, Maybelline, Unilever and P&G.
The transaction will not likely result in any substantial change in the market structure. Given the numerous beauty and personal care companies in the market, sufficient competitive constraints remain after the transaction, according to the commission.