Filed by Natura Holding S.A.
Pursuant to Rule 425 of the Securities
Act of 1933
Subject Company:
Avon Products, Inc.
(Commission File No.: 1-4881)
The following is an English translation of an editors’
note published by Exame Magazine in Portuguese on June 6, 2019:
LETTER FROM EXAME
For more globalisation
Few expressions are so hackneyed as the one which says that in
every crisis there is an opportunity. Well, Natura has gone beyond the cliché: it has managed to resolve two crises to create
its opportunity. The first crisis is the one that, unfortunately, we have all been familiar with for some time: Brazil, which has
never been a country for amateurs, has in recent years proved to be an enormous challenge for the professionals, too. In this kind
of environment, overseas markets become an important support to sustain a company. Natura had already been working on this, acquiring
the Australian operation Aesop and Britain’s The Body Shop. This was when the second crisis came into play: Avon, an extraordinarily
powerful brand, but suffering a process of decline. This crisis made its purchase possible. And, since its situation is very similar
to the period of stagnation Natura itself went through between 2012 and 2016, this gave the company the confidence to dive head
first into the process which should make it the most globalised Brazilian company, with subsidiaries in a hundred countries, more
than double the number of the technology firm Stefanini, which comes in second place with 39 subsidiaries.
It will not be the first major Brazilian brand to want to conquer
the world. Brazil is already a giant in the commodities sector. While the disappearance of the Embraer brand is the outcome of
a success story in the aeronautics technology, rather than the decline of a company (it was sold, not eclipsed). There are also
successful Brazilian companies overseas, a notable example being 3G, owner of brands such as Burger King, Kraft and Heinz. Natura,
like Alpargatas’ Havaianas, but on a much larger scale, is a genuinely Brazilian company that capitalises the positive attributes
of the country: creativity, high spirits and more importantly, a healthy and sustainable link with nature. Furthermore: it signals
the correct way to exploit the Amazon, with innovation and respect for tradition.
Global companies are one of the signs of the economic power of
a country. It is not by chance that so many nations have invested in creating champions to dispute the world market – such
as Samsung, from South Korea, and Mitsubishi, from Japan. This process, however, frequently
results in unpleasantness, as we saw to our dismay with the case
of the meatpacker JBS, among others. It is encouraging to see the transformation, under its own power, of a Brazilian company –
with 75% of its revenues generated in the domestic market – into a global brand, with more than two thirds of its sales overseas.
This is no cosmetic change; it is an example to be followed by its peers in the country.
NO OFFER OR SOLICITATION
This communication is for informational
purposes and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any
vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication is being made
in respect of the proposed transaction involving Natura Holding S.A. (collectively with Natura Cosmeticos S.A., “Natura”)
and Avon Products, Inc. (“Avon”). In connection with the proposed transaction, Natura will file with the Securities
and Exchange Commission (“SEC”) a registration statement on Form F-4 that will include a proxy statement of Avon and
a prospectus of Natura. Natura and Avon also plan to file other documents with the SEC regarding the proposed transaction and a
joint proxy statement/prospectus will be mailed to shareholders of Avon. This communication is not a substitute for any proxy statement,
registration statement, proxy statement/prospectus or other documents that Natura and/or Avon may file with the SEC in connection
with the proposed transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE FORM F-4 AND THE
JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The Form F-4 and the
joint proxy statement/prospectus, as well as other filings containing information about Natura and Avon, will be available without
charge at the SEC’s Internet site (www.sec.gov). Copies of the joint proxy statement/prospectus can also be obtained, when
available, without charge, from Natura’s website at www.NaturaeCo.com. Copies of the joint proxy statement/prospectus can
be obtained, when available, without charge from Avon’s website at www.AvonWorldwide.com.
PARTICIPANTS IN THE SOLICITATION
Natura and Avon, their respective
directors, executive officers and other members of their management and employees may be deemed to be participants in the solicitation
of proxies in connection with the proposed transaction. Information regarding the persons who may, under the rules of the SEC,
be deemed participants in the solicitation of proxies in connection with the proposed transaction, including a description of their
direct or indirect interests, by
security holdings or otherwise,
will be set forth in the joint proxy statement/ prospectus and other relevant materials when they are filed with the SEC. Information
regarding the directors and executive officers of Natura is contained in Natura’s Reference Form for 2018, version 15, which
was filed with the Brazilian Securities Commission on April 24, 2019. Information regarding the directors and executive officers
of Avon is contained in Avon’s definitive proxy statement for its 2019 annual meeting of shareholders, filed with the SEC
on April 2, 2019. These documents can be obtained free of charge from the sources indicated above.
CAUTION ABOUT FORWARD-LOOKING STATEMENTS
Statements in this communication (or in
the documents it incorporates by reference) that are not historical facts or information may be forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Among other things, these forward looking statements may include
statements regarding the proposed transaction involving Natura and Avon; beliefs relating to value creation as a result of a proposed
transaction involving Natura and Avon; the expected timetable for completing the transaction; benefits and synergies of the transaction;
future opportunities for the combined company; and any other statements regarding Avon’s and Natura’s future beliefs,
expectations, plans, intentions, financial condition or performance. In some cases, words such as “estimate,” “project,”
“forecast,” “plan,” “believe,” “may,” “expect,” “anticipate,”
“intend,” “planned,” “potential,” “can,” “expectation,” “could,”
“will,” “would” and similar expressions, or the negative of those expressions, may identify forward-looking
statements. These forward-looking statements are based on Natura’s and Avon’s expectations and beliefs concerning future
events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. These
factors are difficult to predict accurately and may be beyond Natura’s and Avon’s control. Forward-looking statements
in this communication or elsewhere speak only as of the date made. New uncertainties and risks arise from time to time, and it
is impossible for Natura or Avon to predict these events or how they may affect Natura or Avon. Therefore, you should not rely
on any of these forward-looking statements as predictors of future events. Except as required by law, neither Natura nor Avon has
any duty to, and does not intend to, update or revise the forward-looking statements in this communication or elsewhere after the
date this communication is issued. In light of these risks and uncertainties, investors should keep in mind that results, events
or developments discussed in any forward-looking statement made in this communication may not occur. Uncertainties and risk factors
that could affect Natura’s and/or Avon’s future performance and cause results to differ from the forward-looking statements
in this communication include, but are not limited to, (a) the parties’ ability to consummate the transaction or satisfy
the conditions to the completion of the transaction, including the receipt of shareholder approvals and the receipt of regulatory
approvals required for the transaction on the terms expected or on the anticipated schedule; (b) the parties’ ability to
meet expectations regarding the timing, completion and accounting and tax treatments of the transaction; (c) the possibility that
any of the anticipated benefits of the proposed transaction will not be realized or will not be realized within the expected time
period; (d) the risk that integration of Avon’s operations with those of Natura will be materially delayed or will be more
costly or difficult than expected; (e) the failure of the proposed transaction to close for any other reason; (f) the effect
of the announcement of the transaction on customer and consultant relationships and operating results (including, without limitation,
difficulties in maintaining relationships with employees or customers); (g) dilution caused by Natura’s issuance of
additional shares of its common stock in connection with the transaction; (h) the possibility that the transaction may be more
expensive to complete than anticipated,
including as a result of unexpected factors
or events; (i) the diversion of management time on transaction-related issues; (j) the possibility that the intended accounting
and tax treatments of the proposed transactions are not achieved; (k) those risks described in Section 4 of Natura’s Reference
Form for 2018, version 15, which was filed with the Brazilian Securities Commission on April 24, 2019; and (l) those risks described
in Item 1A of Avon’s most recently filed Annual Report on Form 10-K and subsequent reports on Forms 10-Q and 8-K.
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