By James A. Loyola The Philippine Competition Commission (PCC) has approved the acquisition by Natura Cosméticos S.A. (Natura) of Avon Products, Inc. (Avon) which will result in a merger of two global beauty and personal care brands with presence in the Philippines. Avon Products, Inc. is a direct selling company in beauty, household, and personal care categories with home base stationed in New York, US. On the other hand, Natura Group — which includes Natura Cosméticos, Aesop and The Body Shop — is a global personal care cosmetics group headquartered in São Paulo, Brazil. As a result of a corporate restructuring arising from the transaction, PCC noted that a new holding company for the group, Natura Holding S.A. (Natura &Co), will wholly own the shares of Natura and Avon. Natura shareholders stand to gain approximately 76.0 percent of the interests in Natura & Co, while the Avon shareholders will hold approximately 24.0 percent of the interests in Natura & Co. The PCC said the takeover by Natura of Avon does not result in substantial lessening of competition in the Philippine beauty and personal care products market mainly because Natura and Avon do not compete in the same market segment. The merger review noted there is minimal substitution between the beauty products of Natura and Avon because both parties cater to different consumer segments. Given the different target markets, the beauty products on the parties’ respective racks also have significant price differences. The PCC also noted the parties have different modalities for distribution of their products and manifested to the Commission they will retain their current distribution business models after the buyout. Avon popularized the door-to-door cosmetic sales through its “Avon ladies” distribution line and reported to maintain its direct selling business model. On the other hand, Body Shop reported it will also continue its business modality as a specialty store. The merger review also 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 compete 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,” said the PCC.