Avon Products, Inc. sells all of its shares of its manufacturing operations located in Guangzhou to TheFaceshop Co., Ltd., a subsidiary of LG Household & Health Care Ltd. with net proceeds to Avon equaling $44 million.
The companies will enter into an agreement whereby the Guangzhou factory will manufacture products for Avon’s Chinese market as well as other markets and Avon’s employees at the factory will stay with the operation. In a press release, Jan Zijderveld, CEO of Avon, said, “This transaction is a significant step forward in our efforts to ‘Open Up Avon’ by operating more efficiently, with a leaner, more agile global infrastructure. This agreement provides us with greater operational and financial flexibility.” Shares of Avon rallied 4.4 percent during premarket trade after Avon announced the deal.