Published: December 28, 2023 5:20 am
Author: RT
Avon has suspended plans to sell its plant and withdraw from the country, the outlet has reported
International direct-sales cosmetics brand Avon has halted plans to sell its Russian business due to a steep exit tax, Kommersant reported on Wednesday, citing industry sources.
The US-based multinational announced in March 2022 that it had stopped investments in Russia and exports from its Russian plant to other markets following the start of the Ukraine conflict.
Earlier this year, Kommersant reported that Avon had launched preparations to sell the plant, which is just outside Moscow, although the company did not officially confirm its intention to exit the country.
According to industry sources, Avon was negotiating a sale with a number of investors, including Russian cosmetics manufacturer Natura Siberica and Arnest Group, which bought Heineken’s Russian assets in August 2023. Avon’s plans included a transfer of rights to use its brand name but written in Cyrillic.
In November, however, the company told potential buyers that it had decided not to sign binding offers for the sale, Kommersant said.
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Avon’s reversal is linked to a regulation by Russia’s Foreign Investment Commission, which requires exiting foreign companies to sell their assets at discounts of up to 50%, a source told the newspaper.
Commenting on the Western corporate exodus from Russia, Kremlin spokesman Dmitry Peskov told the New York Times earlier this month that “those who are leaving are losing their position on the market. And of course, their property is being bought at a serious discount and taken over by our companies, which are doing it with pleasure.”
Avon is the second-largest beauty products company in Russia, with revenue amounting to 13.89 billion rubles ($151.5 million) in 2022, financial data showed.
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