Natura to sell Avon's Central America business; shares rise

SAO PAULO, Sept 15 (Reuters) - Brazilian cosmetics maker Natura NATU3.SA has agreed to sell Avon's businesses in a series of Central American countries to Grupo PDC, it said on Monday, as part of ongoing efforts to simplify its operations.

The company said in a securities filing that the deal priced at $1 includes Avon's operations in Guatemala, Nicaragua, Panama, Honduras, El Salvador and the Dominican Republic, which are jointly known as Avon CARD.

Natura has been carrying out divestitures as part of a broader organizational shakeup as it pushes for a turnaround, having previously sold the Aesop and The Body Shop brands.

Sao Paulo-traded shares of the company rose more than 3% after the Avon CARD announcement, making it one of the top gainers on benchmark stock index Bovespa .BVSP, which was up 1.1%.

The transaction includes an additional payment to be made upon closing, consisting of a $22 million receivable from Avon Guatemala to Natura's wholly owned subsidiary in Mexico, according to the company.

Natura said it also entered into agreements to continue to supply finished goods to Avon CARD and act as licensor of the Avon brand in the region.

It reiterated it is exploring strategic alternatives for the Avon International unit, which aggregates its Avon businesses outside Latin America and was recently classified as an asset "held for sale."

Avon's businesses in the Dominican Republic and Central America had also been reclassified under this label in August.

Natura has never controlled Avon's U.S. operations.

Analysts at Santander said that the Avon CARD deal should improve sentiment toward Natura's efforts to sell Avon International as well.

"While the financial implications might not be as meaningful as those related to selling Avon International, we estimate around 60 million reais ($11.28 million) in savings from the sale of Avon CARD alone," they added.

($1 = 5.3171 reais)