Fitch puts Natura on watch

Fitch Ratings said it placed Natura Cosmeticos SA's ratings on Negative Watch following the company's announced plan to acquire Avon Products, Inc.

Natura announced that it had reached an agreement with Avon Products to acquire Avon through in an all-share merger, Fitch said.

Natura Holding SA will become the new holding company for the group and will wholly own Natura and Avon shares, the agency said.

Once the transaction is complete, 76% of Natura & Co will be held by Natura's existing shareholders and the remaining 24% by Avon's shareholders, Fitch explained.

The negative watch reflects the execution risks associated with the integration of these businesses, challenges to improve profitability against a dynamic and changing landscape and higher than anticipated medium-term refinancing risks, the agency said.

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