Coty Chairman Bart Becht discusses the strategy behind his bid for Avon in the Wall Street Journal. Click here for the article.
I admire the folks at Coty for stepping up opportunistically and pouncing on Avon. This will be a very interesting deal to watch if it happens. Can you think of a company that has a more distinct heritage and indentity than Avon?
Avon sells primarily its own products through a fleet of indepenent salespeople (with fully 80% of its sales coming from outside the US). Coty sells licensed and branded products (including Calvin Klein and dozens of others) primarily through retail chains and department stores.
The situation is made even more interesting by a couple of facts that have lots of potential for head spinning:
- Coty had previously been in discussions to sell itself to Avon. Those discussions went nowhere so Coty turned the tables and went after Avon.
- Avon is about two and a half times bigger than Coty.
- Avon has huge potential liabilities related to overseas bribery and corruption lawsuits (making valuation a crapshoot).
- Avon is in the process of hunting for a new CEO, a process that Coty has pledged not to interrupt.
I look forward to watching this deal unfold and would welcome comments from anyone with any inside scoop on it.